Agenda — Richmond City Council, May 2, 2023 (part 5 of 5)

May 2, 2023

Finance Department

DATE: May 2, 2023
TO: Mayor Martinez and Members of the City Council
FROM:

Shasa Curl, City Manager
Nickie Mastay, Deputy City Manager-Internal Services
Sharrone Taylor, Interim Director of Human Resources

Subject:

Contract with Raftelis to Provide a Workforce Analysis
FINANCIAL IMPACT: The proposed expenditure will not exceed $200,000.

There will need to be an appropriation from the General Fund. Human Resources Department budget
(01181016-400201).

PREVIOUS COUNCIL
ACTION:

N/A

STATEMENT OF THE
ISSUE:

City staff request both the approval of a contract with Raftelis Financial Consultants, Inc. (“Raftelis”) to provide a Workforce Analysis, and an appropriation of the
necessary funding.

RECOMMENDED ACTION:

APPROVE a contract with Raftelis Financial Consultants, Inc. to provide a workforce analysis, in alignment with a state audit recommendation, in an amount not to exceed
$200,000, with a term beginning June 1, 2023, and
ending March 31, 2024; and APPROPRIATE the
necessary funding – Human Resources Department
(Nickie Mastay 510-620-6609/Sharrone Taylor 510-620-
6803).

AGENDA
REPORT
894

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May 2, 2023

DISCUSSION:

On April 4, 2022, the City of Richmond was notified by the State Auditor that they would be conducting an audit of the City as approved by the Joint Legislative Audit Committee on June 30, 2021. The State Auditor’s local audit program identifies and supports local government agencies that might be at high risk based upon analysis of a City’s audited financial statements. Richmond’s risk assessment began in February 2021 based upon the City’s June 2020 financial statements.

The audit was initiated in May 2022, and was completed and published on November 10, 2022. At the conclusion of the audit, the State Auditor formalized eleven (11) recommendations to the City (Attachment 1). State Auditor recommendation number 6 stated:

To mitigate the costs of increasing salaries, the City should perform a workforce analysis by June 2024. Based on the results of the analysis, the City Council should consider eliminating vacant positions that it deems no longer necessary. Additionally, the City should assess its need for each vacant position before it seeks to fill the positions and eliminate any positions that it does not need.

Request for Proposal

On February 17, 2023, the City Manager’s Office released a Request for Proposals (RFP) to solicit qualified professionals to perform a workforce analysis and to develop a plan that includes succession planning and recommendations not only for vacant positions, but for the proper position for succession planning to be effective for the City in the coming years (Attachment 2).

Key aspects of the scope of services included:

 Reassess the Size of the City Staff: Meet with Department Directors via the City Manager and Human Resources Director to assess staffing needs to determine if the department needs fewer additional staff than their vacancies would suggest.

 Succession Planning and Vacancies: The City would like to take a measured approach to filling vacancies. By taking a measured approach to filling vacancies, this will allow the City time to determine whether any departments, including Police and Fire, should or could operate with a smaller staff. While taking a measured approach to filling vacancies there needs to be an analysis of potential retirements to determine proper succession planning.

 Department Analysis: Facilitate a variety of meetings between/among Department Directors to determine current workflow with the current staff in each division of each department to determine if the department is operating at optimum accuracy and efficiency. Produce a written document that summarizes this analysis with recommendations on workflow and staffing.
895

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May 2, 2023

The RFP was posted on the City’s BidsOnline system where 254 vendors were notified, and 20 vendors downloaded copies of the RFP (Attachment 3). On March 17, 2023, two electronic proposals were received. The proposals were reviewed by City staff members and each vendor was found to be compliant. Subsequent interviews were held with each vendor after which final scores were assigned (Attachment 4).

RFP Rating Matrix 4-11-23
Rater
1 Rater
2 Rater
3 Rater
4 TOTAL
Koff & Associates 76 95 81 75 327
Raftelis 70 78 77 79 304

Interview Rating Matrix 4-24-23
Rater
1 Rater
2 Rater
3 Rater
4 TOTAL
Koff & Associates 76 50 85 83 294
Raftelis 85 70 90 90 335

TOTAL SCORES
Rater
1 Rater
2 Rater
3 Rater
4 TOTAL Rank
Koff & Associates 152 145 166 158 621 2
Raftelis 155 148 167 169 639 1

City staff is requesting approval of a contract with Raftelis to provide a workforce analysis in an amount not-to exceed $200,000, with a term beginning June 1, 2023, and ending March 31, 2024, and to appropriate the necessary funding.

DOCUMENTS ATTACHED:

Attachment 1 – State Audit Report – November 2022
Attachment 2 – Request for Proposal
Attachment 3 – Project Report
Attachment 4 – Rating Matrix
Attachment 5 – Proposed Contract

896
City of Richmond
Anticipated Deficits, High Pension Debt, and
Mismanagement of Its Housing Authority Cause
the City to Be High Risk
November 2022
REPORT 2021 ‑806
897
For questions regarding the contents of this report, please contact our Public Affairs Office at 916.445.0255 This report is also available online at www.auditor.ca.gov | Alternative format reports available upon request | Permission is granted to reproduce reports 621 Capitol Mall, Suite 1200 | Sacramento | CA | 95814

CALIFORNIA STATE AUDITOR
916.445.0255 | TTY 916.445.0033

1.800.952.5665
For complaints of state employee misconduct,
contact us through the Whistleblower Hotline :

Don’t want to miss any of our reports? Subscribe to our email list at auditor.ca.gov 898
Michael S. Tilden Acting State Auditor
621 Capitol Mall, Suite 1200 | Sacramento, CA 95814 | 916.445.0255 | 916.327.0019 fax | www.auditor.ca.gov November 10, 2022
2021-806
The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814
Dear Governor and Legislative Leaders:

Despite recent financial improvements, the city of Richmond’s long-term financial stability remains uncertain. Our office's audit of the city—conducted as part of our high-risk local government agency audit program—concludes that the city is high risk due to its anticipated deficits, high pension debt, and mismanagement of the Richmond Housing Authority (housing authority).

Richmond forecasts a significant long-term deficit, which we believe may worsen based on emerging financial trends. The city anticipates that these deficits may average as much as $6.7 million annually beginning in fiscal year 2023–24 and continue through at least fiscal year 2027–28. Despite having increased its general fund reserves to nearly $49 million in fiscal year 2021–22, Richmond projects that its deficit will deplete those reserves to less than $9 million by fiscal year 2027–28, which is well below levels recommended by financial experts.

Richmond’s growing annual pension costs are a significant barrier to balancing its budgets. In fiscal year 2020–21, Richmond paid $37 million in pension costs. However, these costs could reach $53 million by fiscal year 2028–29. Richmond attempted to mitigate its pension costs in 2005 by issuing $115 million in bonds and investing the proceeds but, after refinancing those bonds in 2022, the city now expects its residents to pay millions in annual debt service until 2044.

Finally, the mismanagement of Richmond's housing authority has resulted in the federal government disallowing millions of dollars in reimbursement of city expenses and requiring the housing authority to transfer its public housing responsibilities to other entities. However, the housing authority has missed numerous federal deadlines associated with this transfer and the city, which provides staff and financial support to the housing authority, may need to provide additional resources to resolve this ongoing problem.

Respectfully submitted,
MICHAEL S. TILDEN, CPA
Acting California State Auditor
899
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CALIFORNIA STATE AUDITOR
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LOCAL HIGH RISK
900

HIGH-RISK ISSUES
City of Richmond, Contra Costa County Risk Designation: High Risk

ISSUE PAGE
Despite Recent Improvements, Richmond’s Long-Term Financial Stability Remains Uncertain Financial Reserves Have Increased, but Risks Remain 7
Richmond Forecasts a Significant Long-Term Deficit, Which Evolving Financial Trends May Worsen 9 The City’s Debt Burden Remains High 13
Addressing Its Poorly Funded Retirement Benefits and Below-Market Compensation Will Increase Richmond’s Expenses
Significant Retirement Obligations Continue to Burden the City 17 Richmond May Have Missed Opportunities to Better Address Its Retiree Health Obligations 18 Increasing the Competitiveness of City Salaries Will Incur Additional Costs 20 The City Has Mismanaged the Richmond Housing Authority
A Decade of Mismanagement Will Result in the Housing Authority Transferring Its Public Housing Responsibilities to Other Entities 23
The Housing Authority Missed Mandatory Deadlines to Complete the Recovery Agreement 25 The Housing Authority May Owe the Internal Revenue Service $1 Million or More in Taxes and Penalties 27 The City Has Not Consistently Followed Its Contracting Policies or Updated Its Fees as Required Richmond Could Do More to Demonstrate It Is Following Requirements to Ensure the Best Value for Its Contracts 29
City Staff Have Not Updated Fee Schedules as Required 30 Appendices
Appendix A—The State Auditor’s Local High-Risk Program 33 Appendix B—Scope and Methodology 35
Agency Response
City of Richmond 39
California State Auditor's Comment on the Response From the City of Richmond 43 v

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LOCAL HIGH RISK
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LOCAL HIGH RISK
902
Risks the City of Richmond Faces
Although Richmond’s general fund reserves have increased in recent years to the point where it has reserves in excess of two months of general fund expenditures, its long-term financial stability remains in question. Its 2022 financial forecast predicts annual deficits that will grow to $13.8 million in fiscal year 2025–26 before shrinking to $9.4 million by fiscal year 2027–28; these deficits threaten to critically deplete the city’s general fund reserves. Further, Richmond’s current forecast may be underestimating inflation and does not account for the possibility of a recession in the later years of the projection. If Richmond eventually exhausts its reserves and spends more than it projects, it will need to either raise revenue or cut city expenditures or services.

Our Local Government High-Risk Dashboard (dashboard), which we updated in October 2022, identified five areas—debt burden, pension obligations, pension costs, future pension costs, and other post employment benefits (OPEB)—in which the city's finances continue to have high risk ratings as indicated in Table 1. Although we determined that Richmond’s overall fiscal risk rating for fiscal year 2020–21 was moderate and adjusted its ranking among the highest-risk cities from 9th to 10th, we conclude that Richmond is high risk based on the totality of factors described in this audit report, particularly its projections of future deficits.

Table 1
Richmond’s Fiscal Risk Indicators Have Improved
FINANCIAL INDICATOR 2018–19 2019–20 2020–21
Overall Risk Rating High Risk High Risk Moderate Risk
General Fund Reserves HIGH HIGH MODERATE
Debt Burden HIGH HIGH HIGH
Liquidity LOW LOW LOW
Revenue Trends MODERATE MODERATE MODERATE
Pension Obligations HIGH HIGH HIGH
Pension Funding MODERATE MODERATE LOW
Pension Costs HIGH HIGH HIGH
Future Pension Costs HIGH HIGH HIGH
OPEB Obligations MODERATE LOW LOW
OPEB Funding HIGH HIGH HIGH
Source: Analysis based on Richmond’s audited financial statements and CalPERS’ actuarial reports. 1 CALIFORNIA STATE AUDITOR
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Addressing the areas in which Richmond continues to be at high risk and counteracting the effects of its long-term wage freezes will increase the city’s expenses. Notably, the California Public Employees’ Retirement System (CalPERS) has projected Richmond’s annual retirement costs to increase from roughly $35 million in fiscal year 2020–21 to $53 million in fiscal year 2028–29. These increasing costs are a potential barrier to the city’s ability to maintain balanced budgets. As of June 2021, Richmond has funded its OPEB trust funds—which assist the city in meeting health care obligations for retired staff—at about 27 percent of the cost of its promised future benefits and has set aside more than $7 million in fiscal year 2022–23 for increasing staff salaries and benefits that it had previously frozen to reduce costs.

However, maintaining salary increases may prove difficult as the city moves closer to deficit spending.

Richmond’s mismanagement of the Richmond Housing Authority (housing authority)—a legally separate entity created to manage low-income housing facilities—has also increased financial risk to the city. Audits by the U.S. Department of Housing and Urban Development (HUD) noted deficiencies in financial practices, oversight, documentation, and accountability. In fact, in 2016 HUD found that the housing authority had misled HUD on the status of its finances and had submitted falsified documentation. In its report, HUD noted that the housing authority had inappropriately allowed the city to use HUD funds, the city had charged the housing authority excessive amounts for rent and services, and the city’s actions had resulted in more than $2 million in misspent HUD funds.

The housing authority signed an agreement with HUD in 2019 with the intent, according to HUD, to effectuate the transfer of the housing authority’s direct public housing responsibilities to other entities, such as developers, who will rehabilitate the properties and hold long-term leases to use them for public housing. Richmond acknowledged this agreement through the signature of its mayor and agreed to work in good faith to assist the housing authority and HUD in accomplishing the tasks described in the agreement. However, the housing authority has missed 11 of the 26 deadlines and not completed the associated tasks needed to make this transfer, many by more than a year. As a result, some low-income housing residents have experienced delays in the rehabilitation of their housing. Although the housing authority is a legally separate entity from the city, the city agreed to assist the housing authority with the agreement; thus, continued concerns related to the housing authority may require additional financial resources from the city.

Richmond has also not consistently followed its policies for contracting and fees. We examined 10 of Richmond’s contracts and found at least two instances in which it failed to follow contracting policies or made errors involving contract management.

For example, Richmond did not justify its use of an alternative contracting process on a $24,500 contract because it failed to make a formal determination that using this alternative process was in the city’s best interest, as it is required to do. Richmond has also not consistently updated its fees to reflect the cost of doing business, thereby forgoing revenues that could help improve its financial condition. 2 CALIFORNIA STATE AUDITOR
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Recommendations
The following are the recommendations we made as a result of our audit.

Descriptions of the findings and conclusions that led to these recommendations can be found in the sections of this report.
• To help ensure that Richmond maintains appropriate reserves for times of fiscal uncertainty, city staff should complete a review by June 2023 of Richmond’s reserve policy to determine whether a higher reserve target is appropriate. As part of the review, staff should consider all the factors the Government Finance Officers’ Association (GFOA) recommends for setting a reserve target. Once that review is complete, city staff should present proposals to the city council for modifying the city’s policy.
• To decrease the risk that Richmond will deplete its reserves, city staff should present by June 2023 to the city council a list of proposed budget actions that would help ensure balanced budgets and eliminate projected deficits. • Richmond should include multiple scenarios in its financial projections, including scenarios with potential additional risks, such as economic downturns or recessions, and how the city would continue to fund its operations under those circumstances.
• To ensure that Richmond is able to fund its retirement-related costs, city staff should propose by June 2023 to the city council a specific policy regarding funding of its pension trust fund for this purpose. Staff should report to the city council on the estimated long-term savings from increasing its direct payments to CalPERS as compared to investing the same amounts in its pension trust fund. Staff members should use this information to inform their recommendations related to funding targets for the pension trust fund and should consider recommending that the council increase the city’s payments directly to CalPERS. • To improve the city’s ability to pay OPEB, Richmond should implement, by June 2023 a policy identifying funds, such as surpluses or one- time revenues, that should be contributed to the OPEB trust fund. Staff should then conduct an annual analysis to determine whether any funds available to the city are applicable under the city’s policy and should present a proposal to the city council to apply those funds to that trust fund.
• To mitigate the costs of increasing salaries, the city should perform a workforce analysis by June 2024. Based on the results of the analysis, the city council should consider eliminating vacant positions that it deems no longer necessary.

Additionally, the city should continue to assess its need for any vacant position before it seeks to fill it.
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• To ensure compliance with federal requirements, Richmond should dedicate the resources necessary to provide all records needed for an independent auditor to complete all outstanding single audits of the housing authority within the next fiscal year.
• To comply with existing legal obligations, Richmond should make available sufficient resources to enable the housing authority to resolve all past-due requirements of the recovery agreement and to meet the remaining deadlines in a timely manner, but no later than January 2024.
• To define Richmond’s responsibility related to the housing authority, the city should immediately enter into a written agreement with the housing authority defining each entity’s financial responsibilities and it should draft plans to resolve past tax liabilities and prevent unnecessary new liabilities. • To ensure that Richmond is receiving the best value when entering into contracts, city staff should immediately begin documenting that they are following the contracting requirements in the city’s municipal code and in the contracting policies for all contracts.
• To reduce potential errors and omissions by city staff members when contracting for goods and services, by January 2023, Richmond should require its finance department to create a comprehensive checklist of required documentation for contract files that other departments must follow when conducting procurements. • To ensure that city fees appropriately cover the cost of providing services, by June 2023, Richmond should determine a cost-effective frequency for updating its Master Fee Schedule (fee schedule) to reflect all allowable costs, including adjusting fees for inflation as appropriate. Richmond should then revise its municipal code as necessary.

Agency Comments
Richmond agreed with our recommendations. We look forward to receiving Richmond's corrective action plan by January 2023 to understand the specific actions it has undertaken, or plans to take, to address the conditions that led us to designate it as high risk.
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Introduction
The city of Richmond, located in Contra Costa County, had approximately 116,000 residents in 2021 and about 690 full-time, budgeted employees. Richmond is a charter city and therefore has authority over its municipal affairs, and it may establish certain local ordinances beyond those that state law allows for cities that operate under general law. Voters elect a seven-member city council. The mayor is elected separately and is one of the council members. The council in turn appoints a city manager, who implements council policy and acts as the chief executive and administrative officer of the city. Richmond provides many services to residents, including libraries, parks, community facilities, and public safety.

Richmond has had a long-standing history of financial challenges. For example, in 2004 our office audited the city and found that it had drained its financial assets and jeopardized its financial stability by failing to control spending while its revenues decreased. In 2015 Moody's, a credit rating agency, downgraded the city’s credit rating, citing $396 million in combined governmental and enterprise debt. Further, our dashboard has assessed Richmond as having high fiscal risk every year from fiscal years 2016–17 through 2019–20. Richmond showed some improvement in our most recent analysis of its fiscal health for fiscal year 2020–21.

Despite its challenges, since fiscal year 2016–17, Richmond has received more general fund money than it has spent, as indicated in Figure 1. General fund revenue comes in part from property taxes and sales taxes, and it funds the city’s core government services, including public safety, recreation, and administration.

In fiscal year 2020–21, Richmond had general fund revenues of $179 million and expenditures of $162 million. As of June 2021, the general fund had a total balance of $49 million, $35 million of which made up the city’s reserves. The city estimates that it received $194 million in revenues and spent $166 million out of the general fund in fiscal year 2021–22.

In addition to its other responsibilities, the city operates a number of businesslike activities. One such program is the Richmond housing authority, a separate legal entity created in 1941 to manage low-income housing facilities. Members of the city council serve on the housing authority’s board and the Richmond finance department manages the authority’s finances. Currently, the housing authority directly administers more than 240 low-income housing units across two properties.

The housing authority receives about 40 percent of its $4.8 million in revenues from the federal government and about 16 percent from the city. As we detail later in this report, HUD found that the housing authority mismanaged its financial operations and that its external auditor had not completed several years of audits because of staff turnover and inadequate recordkeeping within the finance department. 5 CALIFORNIA STATE AUDITOR
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Figure 1
Richmond’s General Fund Revenues Have Slightly Exceeded Expenditures in Recent Years 2016–17 2017–18 2018–19 2019–20 2020–21
Fiscal Year
0 20
40 60
80 100
120
140
160
180
$200
In Millions
General Fund Revenues
General Fund Expenditures
Source: Richmond’s audited financial statements.
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Despite Recent Improvements,
Richmond’s Long‑Term Financial
Stability Remains Uncertain
Financial Reserves Have Increased, but Risks Remain
In June 2021, Richmond reached $34.7 million in general fund reserves, exceeding the minimum amount experts typically recommend. The city further estimates based on unaudited information that, as of October 2022, its reserve has since increased to almost $49 million. The GFOA recommends that a general-purpose government establish a policy to maintain an unrestricted general fund balance that would at least cover a minimum of two months—or about 17 percent—of its regular general fund operating revenues or expenditures. Richmond’s general fund reserve policy substantially aligns with the GFOA recommendation. The policy requires the city to maintain a minimum of 15 percent of the next year’s budgeted general fund expenditures as its reserve. Richmond’s 2021 unrestricted fund balance represented more than 19 percent of its fiscal year 2020–21 general fund expenditures,1 exceeding the GFOA’s minimum recommendation. Richmond was able to reach this general fund balance partly through revenues that are unlikely to be repeated regularly, such as unexpectedly high property transfer taxes.

The city’s current reserve represents significant growth from prior years. For example, in June 2018, Richmond only had $17.7 million in reserve, just 11 percent of its expenditures.

For fiscal year 2019–20, we considered the city’s reserve level a high risk because it maintained low general fund balances compared to its expenditures and transfers, and it had had limited growth in its reserves in previous years. However, the city’s improved balance, illustrated in Figure 2, led to our updated determination that reserves are now an area of moderate risk for the city as of October 2022.

That said, Richmond may require a higher reserve target to address the specific challenges it may face. According to the GFOA, governments may need to set policies to maintain more than the minimum recommended reserves. The GFOA has identified five factors that governments should consider when setting a reserve target. As indicated in Table 2, Richmond has not sufficiently reduced or eliminated risks related to three of the five factors, which could lead the city to need greater reserves than its current policy dictates. For example, the city could experience volatile revenues and expenditures during the next few years because of unusual inflation and other economic trends. Beginning in fiscal year 2022–23, Richmond’s reserve policy now requires a range of reserves from 15 percent to 20 percent of general fund expenditures; however, this minimum may still be too low to meet the city’s needs.
1 We include in this calculation both the $162 million Richmond reported in general fund expenditures and an additional $16 million it transferred out of the general fund that year. The city’s reserve policy requires that transfers out be included along with expenditures to calculate the reserve level.
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Figure 2
Richmond Has Been Increasing Its General Fund Reserves
0 5
10 15
20 25
30 35
40 45
$50
Fiscal Year
2016–17 2017–18 2018–19 2019–20 2020–21 2021–22*
In Millions
General Fund Reserves
Source: Richmond’s audited financial statements and staff reports to the city council.

Note: This figure does not include portions of the general fund balance that Richmond identified as nonspendable or otherwise restricted.
* The fiscal year 2021–22 reserve is based on unaudited estimates from the city.

Insufficient reserves could leave Richmond unable to respond effectively to financial emergencies or maintain city services during economic downturns. Although maintaining two months of reserves is an important milestone that could help the city weather a short-term crisis—such as emergency infrastructure replacement—the city’s minimum target of 15 percent could quickly prove inadequate in the face of a severe recession or long-term economic downturn, especially given Richmond’s other risk factors.

In fact, Richmond’s independent auditor found that the city’s reserves constituted a significant weakness as of June 2021. The city’s auditor noted that the low general fund balance could eventually require Richmond to cut costs significantly in order to continue operations while also building up its reserves. Moreover, a city consultant has indicated that cost-cutting measures could include reducing the overall number of city employees and shuttering certain services, such as library branches. Though dedicating funds to maintain adequate reserves could require Richmond to make difficult budgeting decisions over the next several years, doing so may be necessary to ensure that it can maintain services during uncertain economic times ahead. After we shared our concerns regarding the city’s reserve levels with Richmond, staff reported to the city council that the city 8 CALIFORNIA STATE AUDITOR
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would perform an analysis on adequate reserve levels based on the GFOA’s guidance.

Doing so will be an important step in ensuring that Richmond seeks to maintain adequate fund balances to support its unique needs.

Table 2
Richmond Has Multiple Areas of Concern That May Require Increased Reserves

GFOA IDENTIFIED

RISK FACTOR

HAS RICHMOND

REDUCED OR
ELIMINATED THE RISK?

CONDITIONS WITHIN RICHMOND
Predictability of
revenues and
expenditures
NO
Richmond has identified the potential for significant year‑to‑year variation in its revenue and expenditures. The city has also acknowledged that inflation is a significant uncertainty going forward.

Risk of one‑time
and emergency
expenditures
NO
As we discuss later in the report, the housing authority represents an ongoing risk of significant one‑time expenditures for Richmond.

Potential need for
general fund support
of other funds
NO
Several of Richmond’s other funds have had negative balances, some in excess of $2 million, that staff proposed using the general fund to stabilize in October 2022.

It remains to be seen whether the city can avoid future deficits in its other funds.

Potential impact on
bond ratings YES
Richmond’s credit rating has been steadily improving. The city recently received a reaffirmed credit rating of AA‑ from Standard & Poor’s in August 2022.

Planned other uses
for unrestricted
funds YES
Richmond has previously allocated millions in its reserves for other purposes.

In June 2021, for example, Richmond reported that more than $12 million of its $34.7 million reserve had already been allocated. In October 2022, after we highlighted this risk, staff proposed releasing the majority of its allocated funds such that only $1.4 million of the reserve would have planned uses.

Source: Richmond’s audited financial statements, Richmond’s financial projection and budget documents, staff reports to the city council, reports from credit‑rating agencies, and interviews with city budget staff.

Richmond Forecasts a Significant Long-Term Deficit, Which Evolving Financial Trends May Worsen
Richmond’s recent budget projections—produced by two different consultants and by city staff members using various models over multiple years—all predict that it will face future deficits because of inadequate general fund revenues and rising expenditures.

For example, in 2021 a consultant anticipated annual budget deficits that would grow from $8 million in fiscal year 2022–23 to $26 million in fiscal year 2027–28, eventually declining and stabilizing at $18 million annually through fiscal year 2030–31. Richmond city staff members completed their projection in September 2022, showing less severe deficits of about $13.8 million in fiscal year 2025–26 before shrinking to $9.4 million by fiscal year 2027–28. Despite the differences between the consultant’s projections, approach, and assumptions and those of the city staff, city staff members agree that Richmond is facing future deficits. City staff have identified several long-term obstacles to fiscal sustainability, including future costs for infrastructure maintenance, the need to fund growing retirement benefits costs, and the difficulty of addressing these challenges while building up adequate reserves. As Richmond’s consultant warned in 2021, not addressing projected budgetary shortfalls could result in the city being unable to support key city services.
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In recent years, Richmond has avoided deficits both through unexpected revenue and the implementation of a variety of short-term and long-term measures, as the text box describes. For example, in fiscal year 2020–21, the city anticipated $6 million in revenue from its property transfer tax; however, it received $20 million, largely due to tax revenue from several large property
sales. This unexpected $14 million—which
the city indicates is unlikely to reoccur—
accounts for the entire $10.5 million increase
in Richmond’s general fund balance for that
fiscal year. In addition, Richmond decreased
its expenses by taking steps such as keeping
certain positions vacant and freezing staff
compensation levels.

Although some of the actions Richmond
has taken—such as implementing new
voter-approved taxes—will improve its
long-term fiscal sustainability, others may
not be sustainable in the future. For example,
Richmond has relied on savings from
freezing cost-of-living adjustments to some
staff salaries since 2015; however, it recently
increased staff compensation, which will
decrease its ability to maintain balanced
budgets. Thus, Richmond will likely need to
seek additional revenue or decrease other
expenses to prevent future deficits.

In 2021 a consultant provided an overview
of past projections, an updated set of
projections, and warnings about future fiscal
issues to the city council. The consultant
warned that, although the city might
experience individual positive and negative
economic events and might employ various
strategies to report balanced budgets, it would still face a long-term structural deficit, largely because of increasing personnel costs. Ultimately, the consultant determined that Richmond would need to increase general fund revenues or decrease expenditures by $5 million to $21 million per year in order to both balance its budget and maintain at least minimum reserve levels.

The city’s own financial forecast from September 2022 projects deficits averaging about $6.7 million annually through fiscal year 2027–28, the farthest the city has projected.

Under this forecast, which Figure 3 shows, the city predicts that it will achieve a surplus in fiscal year 2022–23 but then operate at a deficit in each of the subsequent fiscal years, peaking at a shortfall of nearly $14 million in fiscal year 2025–26. The city identified rising costs to fund retirement programs and increased city salaries as contributing factors to its projected deficit.

Examples of Strategies and
Circumstances That Allowed Richmond
to Avoid Deficits in Recent Years
The city identified key measures it employed
or circumstances it benefited from which
allowed it to avoid deficits:

New Revenue. In 2018 and 2020, Richmond
voters approved a new rate structure for taxes
collected from property sales and increased a
business tax.

Pandemic Recovery. In fiscal year 2020–21,
the economic recovery from the pandemic
contributed to the city collecting $5 million
more in sales tax than it budgeted,
$1 million more in property taxes, and
almost $1 million more in utility taxes.

Salary Savings. Until recently, Richmond had
not provided salary increases for non‑public
safety staff since 2015 or for many public safety
positions since 2018.

Staff Vacancies. According to the finance
director, about 6 percent of Richmond’s
approximately 690 city positions historically
remain vacant.

Source: Richmond’s financial statements,
Richmond’s website, staff reports to the city council,
and interviews with city staff.
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912
Figure 3
Richmond’s Latest Projections Show Expenditures Exceeding Revenues 2022–23 2023–24 2024–25 2025–26 2026–27 2027–28
Fiscal Year
100
120
140
160
180
200
220
240
$260
In Millions
$1.3M $7.7M $13.8M $10.9M $9.4M
Projected Revenues
Projected Expenditures
Operating Deﬁcit:

Source: Richmond’s projection documents.

Richmond’s current projections anticipate that, without significant cuts to city expenses or services or without new revenue, its general fund will run critically low on reserves in fiscal year 2027–28, reaching less than $9 million, or the equivalent of less than two weeks of expenditures, as indicated in Figure 4. Richmond’s consultant has provided a variety of options for the city council to consider as long-term budget solutions to avoid deficits, including contracting out police services, contracting out or reducing library services, reducing social services, and substantially decreasing the city’s workforce. Richmond’s city council has not yet considered these actions because, according to the finance director, city staff is still analyzing its 2022 projection and is reviewing potential methods to create new revenue. Nevertheless, the city’s projections suggest that it will soon need to reduce its expenditures by an average of more than $6 million annually unless its revenues increase by a similar amount. Otherwise, maintaining adequate services for its residents will become increasingly difficult.
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Figure 4
Richmond’s Forecasted Deficits Could Critically Deplete Its General Fund Reserves 0 5
10 15
20 25
30 35
40 45
50 55
$60
2022–23* 2023–24 2024–25 2025–26 2026–27 2027–28
Fiscal Year
General Fund Reserves (in millions)
The city falls below
GFOA's recommended
reserve level.

The city has less
than two weeks of
expenses in reserve.

Recommended
reserve level.

Source: Documents provided by Richmond’s finance department, staff reports to the city council, and the GFOA website. * The starting fund balance in fiscal year 2022–23 is based on unaudited estimates the city published in October 2022.

Further, Richmond may encounter more severe shortfalls than it has forecast because of uncertain economic trends. First, Richmond’s staff explained that the projection assumes that inflation—which was at 8 percent year-over-year as of August 2022— will largely return to normal rates after a single year. Though the city’s forecast does account for certain expense increases due to inflation, such as higher health insurance costs, other expense projections may be too low if high inflation persists past 2023. The Congressional Budget Office and Federal Reserve Bank have predicted that it could take multiple years for inflation to return to long-term average rates, indicating that the city may spend more than it projects in future years because of higher inflation.

Second, the possibility of a recession threatens the city’s long-term revenue potential. In 2021 Richmond’s consultant noted that the city could face a mild recession beginning in fiscal year 2026–27, suggesting that including that possibility 12 CALIFORNIA STATE AUDITOR
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in projections could help determine whether Richmond’s reserves are sustainable.

However, city staff explained that the 2022 projection does not include the chance of such a recession because events near the end of the decade were too far out for the city to predict. Instead, Richmond included what staff described as a conservative estimate of revenue growth in the first few years of the projection to account for immediate recession risks based on current economic events. However, if the city experiences cyclical recessions in six- or seven-year intervals, as the consultant predicted, another recession at the end of the decade could significantly reduce revenues even as the city draws down its reserves.

Applying more conservative assumptions to Richmond’s projections indicates that the city may have to make steeper budget cuts sooner than it currently projects.

For example, if current rates of inflation persist for some years, Richmond may experience higher than anticipated expenses in fiscal years 2024–25 and 2025–26.

Additionally, if Richmond experiences a recession near the end of the period covered by its forecast, it might take in less revenue in fiscal year 2027–28 than predicted or run a series of deficits in the years following the end of its projections. Such deficits could cause Richmond to face more severe or more prolonged shortfalls than predicted and thus require the city to revisit the difficult budgeting decisions the consultant proposed, such as reductions in service or workforce.

In October 2022, we updated the annual assessment of fiscal risk we conduct related to California cities, which we use in part to identify cities that may require further review. During that update, we adjusted Richmond’s overall fiscal risk rating to moderate risk based on financial information from fiscal year 2020–21. This change in rating and Richmond’s movement from the 9th to the 10th city at greatest risk reflects improvement in certain risk indicators on our online dashboard. However, Richmond retains many high-risk characteristics, including its risk of significant projected deficits. Our ultimate designation of Richmond as high risk for the purposes of our high-risk local government agency audit program reflects the totality of the findings in this report and informs our report title, which notes Richmond’s high-risk status.

The City’s Debt Burden Remains High
Richmond’s large debt burden may become a significant impediment to its ability to maintain balanced budgets. As of June 2021, Richmond had about $250 million in debt related to its governmental activities. However, in fiscal year 2020–21, only $1 million of Richmond’s $162 million in operating expenditures in the city’s general fund directly supported debt service. Richmond paid the remainder of its debt service—another $20 million in fiscal year 2020–21—with the city’s other governmental funds, several of which are designated for this purpose.2 2 Richmond operates a variety of additional funds for specific purposes, such as revenue collection, public safety, and support for certain grant programs. Moreover, it has three funds designated for paying debt service. Much of the money these funds use to pay debt service comes from a special property tax that we discuss later in this section. 13 CALIFORNIA STATE AUDITOR
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These debt service payments represent a risk to the city’s overall finances, including to the general fund. If Richmond’s revenues from other sources prove insufficient, it may need to use general funds to support its debt service. Thus, the city’s management of its overall debt load will be a key step to ensuring the sustainability of its operations in the future. The city’s debt, and the potential strain it imposes on the city’s revenues, leads us to determine that Richmond’s debt burden is a high-risk area.

Much of Richmond’s $250 million in outstanding governmental activities debt—56 percent as of June 2021—comes from its decision to create short-term savings using pension obligation bonds. Pension obligation bonds are a type of taxable bond that cities can use to fund their retirement programs and then pay back over decades. After it issued bonds totaling almost $115 million in 2005, Richmond sent $114 million in proceeds to CalPERS to support its retirement obligations. This issuance was part of a complex set of transactions, which resulted in Richmond paying only minimal debt service until two scheduled payment updates in subsequent years. The first of the payment updates occurred in 2013 and resulted in higher annual payments for $75 million of the bonds.

A second update was set to further increase payments beginning in 2023 on another $128 million of the bonds.3
Richmond reports that it initially issued the debt in this manner because it needed short-term budgetary savings and lacked other options because of its poor credit rating at the time. The staff asserts that the bonds and related agreements created savings on combined debt and pension costs from 2005 through 2013, allowed for smaller savings from 2013 through 2020, and would result in increased costs after 2021. Under this debt arrangement, bond payments would have increased from a range of $9 million to $13 million annually—the amounts the city reported paying from 2013 through 2022—to a range of $15 million to $22 million annually. However, Richmond refinanced this debt in September 2022.

Richmond likely missed an opportunity to lower the debt service costs for its pension obligation bonds. From 2020 through much of 2021, interest rates on U.S. treasury bonds, which influence interest rates on other bonds, were at historic lows. Before September 2022, Richmond had been working toward refinancing its pension obligation bonds for more than a year in an attempt to take advantage of these low interest rates and avoid increased debt expenses. According to Richmond’s finance director, managerial turnover and the city’s lengthy process to find financial and legal consultants caused delay.

Although the city council instructed staff in June 2022 to issue new bonds, bond interest rates began rapidly increasing in March 2022. U.S. Treasury bond rates had almost doubled from 1.65 percent at the end of April 2021 to 3.15 percent as of August 2022.

For perspective, such a rate increase on a $100 million 20-year bond issuance would result in about $900,000 in higher payments annually. The city’s actual debt structure is more complex than a simple bond, and the city asserts that it achieved limited one-time savings in 2022 by reducing a fee payment by more than $1 million. However, the volatile interest rates we highlight provide an example of the risks cities take when issuing or 3 The value of the bonds Richmond paid beginning in 2013 and would have begun paying in 2023 is higher than the initial $115 million in proceeds because it includes fees the city incurred both when it entered into the debt and when it subsequently negotiated its interest rates.
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refinancing pension obligation bonds generally and the importance of considering market conditions. For example, in October 2021, staff noted that an interest rate increase of even a tenth of a percent could cost the city more than $1 million in current dollars. Figure 5 shows the timeline of some of the actions Richmond has taken toward refinancing since 2021 and how interest rates have increased over that time.

Figure 5
Richmond Deliberated About Refinancing Options for More Than a Year As Borrowing Costs Rose Jan. 2021Feb. 2021Mar. 2021Apr. 2021May 2021Jun. 2021Jul. 2021Aug. 2021Sep. 2021Oct. 2021Nov. 2021Dec. 2021Jan. 2022Feb. 2022Mar. 2022Apr. 2022May. 2022Jun. 2022Jul. 2022Aug. 2022Sep. 2022 Date
U.S. 10-Year Treasury Rates*

0.0 0.5

1.0 1.5

2.0 2.5

3.0 3.5

4.0%
April 6, 2021
Staﬀ presents analysis
and reﬁnancing options
to city council.

April 26, 2022
Staﬀ presents analyst's
conclusions to city council.

June 21, 2022
City council
authorizes issuance.

September 8, 2022
City issues new
bonds.

December 7 , 2021
City procures a
ﬁnancial analyst.

October 5, 2021
Staﬀ recommends quick
action to reﬁnance.

Source: U.S. Treasury website, city council meeting minutes, and staff reports to the city council. * U.S. treasury rates influence interest rates on other bonds. 15 CALIFORNIA STATE AUDITOR
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Further, when Richmond refinanced its bonds, it extended its repayment period, which will add to the total amount of interest it will pay over the lifetime of the bonds. Though the city was scheduled to finish repaying the debt service on its original pension obligation bonds by 2034, it elected to pay debt service on the new bonds until 2044—an extension of 10 years. According to the city’s financial consultant, this extension would further reduce costs to the general fund in the near term and shift more of the debt costs to the future when there would be higher tax revenues available for debt service. However, the consultant also warned that the city’s total general fund costs related to its pensions and debt service for pension obligation bonds would consequently increase by $30 million over the life of the bonds.

Richmond’s delay in refinancing its pension debt and its decision to increase the years required for debt service will impact its taxpayers for decades. Richmond pays the majority of the debt service on its pension obligation bonds through a surcharge on property taxes (pension tax). This arrangement limits the impact on the general fund of debt service for these bonds. However, it also highlights the city’s duty to its taxpayers to secure the best possible investments and to efficiently use the taxes it levies.

Please refer to the section beginning on page 3 to find the recommendations we have made to address this area of risk to the city.
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Addressing Its Poorly Funded Retirement
Benefits and Below‑Market Compensation
Will Increase Richmond’s Expenses
Significant Retirement Obligations Continue to Burden the City Richmond’s rising pension costs—the money it contributes annually to support its program to provide guaranteed retirement benefits—are an additional risk to its taxpayers and another potential barrier to maintaining balanced budgets. Richmond participates in CalPERS and pays annual contributions to its pension plans based in part on payroll size and investment growth and the size of its unfunded pension liabilities.4 In fiscal year 2020–21, the city paid more than $35 million in pension costs, almost a quarter of its $162 million in total general fund expenditures for the year; however, some of the general fund costs—about $6 million to $10 million—are typically reimbursed through the pension tax.5 As of 2022, CalPERS reported that Richmond’s annual pension costs are increasing and projects they could reach $53 million by fiscal year 2028–29. Richmond’s rising pension costs led to our determination that those pension costs are an area of high risk.

Richmond is incurring significant annual costs now because its historical contributions have been insufficient to fund all the promised pension benefits. The value of the city’s investments have not yet recovered from significant losses in fiscal year 2008–09, nor has Richmond contributed significant additional funds to make up the shortfall. Thus, Richmond’s pension funding level—the percent of assets it has relative to the cost of promised benefits—dropped to less than 71 percent in 2020, due in large part to minimal returns in several preceding years. By the end of fiscal year 2020–21, the funding level increased to more than 80 percent from strong investment returns for the CalPERS portfolio; however, this is still less than the 100 percent funding target the GFOA recommends. Further, this reported growth does not yet account for significant CalPERS investment losses in the most recent fiscal year. Although Richmond has been making annual payments assigned by CalPERS to address its shortfall, CalPERS projects that it will take decades for the payments to amount to a 100 percent funding level. These payments represent the majority of Richmond’s projected pension costs. For example, in 2022 CalPERS projected that, in fiscal year 2028–29, about 66 percent of Richmond’s payment would go to address the shortfall, while only 34 percent would fund ongoing pension costs. Contributing additional funds to CalPERS to further improve Richmond’s funding status would require difficult budgeting decisions by the city. However, additional contributions represent an opportunity to reduce cumulative city expenditures by tens or hundreds of millions of dollars in the coming decades. 4 Richmond’s investments with CalPERS are separated into two plans—one specifically for safety employees and the second for other employees.
5 In addition to the city’s two CalPERS plans, Richmond pays pension costs of less than $1.5 million for two smaller pension plans. We have focused our discussion on the two larger plans because they represent the significant majority of the city’s annual pension costs. 17 CALIFORNIA STATE AUDITOR
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In July 2022, Richmond’s city council approved the use of an irrevocable trust fund for pension costs, which would give it an additional tool to address its pension shortfall.6 According to CalPERS, such a fund can generate investment income to reduce pension impacts on city budgets and help to offset costs during financial crises. Staff members did not ask the council to adopt a specific funding schedule for the trust fund, but they reported that Richmond should be able to generate almost $1 million per year by seeking discounts from CalPERS for making the city’s annual contribution at the beginning of the fiscal year, as it did in fiscal year 2021–22.

Although Richmond’s pension trust fund may prove an effective decision, it also increases the risk the city will suffer long-term losses compared to other investment options. Staff reported to the city council that money placed in the pension trust fund might earn more than if the city kept the money in its existing investment accounts and that investing with a private fund manager would give the city greater control over the timing and risk levels of its investments. Staff also reported that the city could use the trust fund to pay immediate pension costs in an emergency. These represent important considerations. Nonetheless, while the private fund would allow the city to take on greater risk for potentially greater returns, such an action also increases the risk of losses. Further, the outside investment manager charges higher management fees than the fees CalPERS charges for similar trust funds.

The city could do more to evaluate possible options for managing its pension costs.

Though staff members acknowledged to the city council that it would also be possible to send additional money directly to CalPERS rather than investing it in a trust fund, they did not provide the council an analysis of the relative fiscal benefits of such a strategy. Instead, they recommended using the outside trust fund because the city would be able to experience benefits sooner and have more control over its investments. The finance director asserted that the city’s management held verbal discussions on the different options available and chose the private trust fund for flexibility and investment diversification reasons, but did not provide an analysis comparing the long-term fiscal benefits of the different options. Therefore, we are concerned that Richmond has not fully considered the value of using some or all of its expected $1 million in annual early-payment discounts to make additional payments to CalPERS and directly address its shortfall. Additional payments would only slightly reduce Richmond’s annual contribution to CalPERS in individual years; however, they would have a cumulative effect over time, as amounts invested with the State double about every 12 years at CalPERS’ expected investment growth rate.

Richmond May Have Missed Opportunities to Better Address Its Retiree Health Obligations
In addition to its pension costs, Richmond pays significant annual costs toward retiree health benefits. Richmond’s OPEB programs fund medical insurance costs for its retired employees, with annual costs shared between the city and 6 The city already possessed a trust fund for certain retiree health funding, which we discuss in the next section. The city elected to use this trust fund for both its pension and other benefit costs by dividing it into multiple accounts going forward. We refer to these accounts as separate trust funds for the purposes of this report. 18 CALIFORNIA STATE AUDITOR
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current employees. The city has contributed an average of more than $11.5 million per year since fiscal year 2016–17. Although the city has created trust funds to address its OPEB expenses, the funds’ balances are not yet high enough to be effective. In 2008 the city established a trust fund that it could use to partially fund its future OPEB obligations in a similar manner to its approach to pension funding, a practice the GFOA recommends. As of June 2021, Richmond had $39 million in its two OPEB trust funds—significant growth over its $9 million balance in fiscal year 2016–17. However, the $39 million still represented only 27 percent of Richmond’s promised future benefits.7 This funding level is far short of the GFOA’s recommended target of 100 percent funding. As a result, the funds’ investment income has been historically inadequate to pay benefits without millions of dollars in additional annual contributions from the city.

In 2016 the city council adopted a policy to place into its OPEB trust funds half of its one-time revenues and half of its surpluses above those needed to meet its reserve goals. However, until recently, Richmond had not made a contribution under this policy since 2018. Richmond’s finance staff explained that when the city increased its reserve target from 7 percent to 15 percent of its budgeted expenditures beginning in fiscal year 2018–19, the likelihood of dedicated contributions decreased. After we discussed the lack of contributions with city management, staff proposed and the city council approved a $6 million contribution to the OPEB trust funds in October 2022. The city also enacted a new policy in 2022 that removed the requirements for Richmond to make the types of contributions described above in the future.

We acknowledge that the city’s surplus revenue may have been limited as it built reserves and responded to the pandemic. However, finance staff were only able to provide evidence of very limited analysis they had conducted to determine whether certain unexpected revenues qualified under the policy and should have been contributed to the OPEB trust fund. Notably, Richmond did not make dedicated contributions to its trust funds in fiscal year 2020–21, despite exceeding its reserve target by $6.5 million and reporting a surplus of $10.4 million, largely as a result of tax revenue from property sales. Thus, a contribution of up to $6.5 million may have been appropriate once the city determined how much of its surplus and revenue was eligible under its policies. Finance staff asserted that Richmond did not need to contribute any of this money to OPEB because the city set aside much of its surplus for future fiscal years. However, the city’s policies did not exempt such set-aside funds from being considered for OPEB contributions. Had Richmond completed a more thorough analysis to determine whether additional dedicated contributions were appropriate based on its OPEB funding policy and reserve policy in fiscal year 2020–21, it may have been able to more quickly increase the balance of its OPEB trust funds. Increasing this balance would allow the city to reduce its long-term annual costs, potentially saving it millions of dollars in the coming decades. 7 The majority of Richmond’s OPEB funds are in the original trust fund it established in 2008. In 2017 the city established a second, smaller trust fund to invest OPEB funds for police officers. 19 CALIFORNIA STATE AUDITOR
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Increasing the Competitiveness of City Salaries Will Incur Additional Costs As part of Richmond’s efforts to reduce expenses, it did not provide cost-of-living salary increases to city employees for up to the past seven years. Richmond provides different compensation packages for several groups of employees, such as those in executive positions, staff positions, and public safety positions. For its non-public safety employees, the city last offered a cost-of-living adjustment to salaries in July 2015, more than seven years ago. Meanwhile, before 2022, the city had last offered nonmanagerial public safety employees in the police and fire departments cost-of-living increases in 2018. As Table 3 shows, these decisions came in spite of prices having risen 24 percent since 2015.

According to Richmond’s budget administrator, these decisions to not provide salary increases represented the types of difficult steps the city has taken in order to promote fiscal stability.

Table 3
Richmond Delayed Providing Raises for Years as the Cost of Living Significantly Increased

EMPLOYEE
CATEGORY EMPLOYEE LEVEL LAST COST‑OF‑LIVING

ADJUSTMENT

RECENT OR NEXT
COST‑OF‑LIVING

ADJUSTMENT

INFLATION SINCE LAST
COST‑OF‑LIVING ADJUSTMENT
(THROUGH JUNE 2022)
Non-Safety All July 2015 Jan. 2023 (5%) 24%
Public Safety Firefighters July 2018 June 2022 (1%) 18% Fire Management July 2018 None Scheduled 18%
Police Officers July 2018 June 2022 (1%) 18%
Police Management Jan. 2016 June 2022 (1%) 25%
Source: Richmond’s bargaining agreements, Bureau of Labor Statistics website, and compensation information on Richmond’s website.

Richmond’s decision to reduce payroll costs likely contributed to its high vacancy rate for city positions and high turnover rates among employees. Although Richmond’s overall vacancy rate varies from month to month and has been affected by such factors as hiring freezes during the pandemic, the director of finance stated that vacancy rates are about 6 percent annually—high enough to negatively affect department operations. Further, the city experienced several executive departures in recent years. As of April 2022, when the audit started, Richmond had filled some of those positions, including city manager, deputy city manager, library and community services director, and finance director, on an interim basis.8 According to the city’s data, as of April 2022, several departments were experiencing vacancy rates significantly above the 6 percent estimate. For example, the finance department reported a 24 percent vacancy rate, the police department a 20 percent vacancy rate, and the public works department a 15 percent vacancy rate. 8 As of October 2022, one deputy city manager position continues to be vacant, and the library and community services director is filled on an interim basis.
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Vacancy rates this high can affect the efficiency and effectiveness of city services and at times can result in increased costs. For example, the finance director acknowledged that Richmond’s finance department has been adversely affected by high vacancies and turnover, limiting the staff’s ability to take on projects and complete the department’s duties. Similarly, the 20 percent vacancy rate in Richmond’s police force has resulted in high overtime costs. Significant overtime can further result in issues with staff retention and may ultimately affect critical services.

Richmond is taking steps to increase employee compensation. In 2021 the city negotiated a cost-of-living adjustment for its non-safety employees. Richmond agreed to a 5 percent cost-of-living increase to take effect in January 2023, followed by 4 percent increases in each of the next two years. Richmond also provided a cost-of-living salary increase in 2022 to many of its safety employees, an increase that the city acknowledged it had delayed implementing since 2020. In addition to these adjustments, a consultant to the city issued a compensation study in 2021 that determined the city was typically paying 7 percent to 8 percent below the market rate for base pay for its positions. In response, the city built funding for addressing the consultants findings into its fiscal year 2022–23 budget.

These efforts to increase compensation represent a substantial policy shift for the city, as it must now identify alternative avenues for long-term savings or generate additional revenues. Although salary increases may assist Richmond in recruiting and retaining staff, the associated expenses will increase the burden on the annual budget. In June 2022, staff reported to the city council that the upcoming negotiated cost-of-living adjustments contributed to significant increases in fiscal year 2022–23 to salaries and benefits over the previous year. In total, the city expects an additional $7.4 million in fiscal year 2022–23 costs to implement compensation increases based on its consultant’s report and cost-of-living adjustments. The finance director explained that Richmond is considering a variety of options to address these new costs, including reducing professional service expenditures and updating some positions’ responsibilities to acknowledge that other positions are expected to remain vacant.

To alleviate the costs of increasing city employees’ compensation, Richmond should also take the opportunity to reassess the size of its staff. Richmond budgeted savings of approximately $5.8 million from fiscal year 2021–22 vacancies, and it budgeted a vacancy savings of $8.3 million for fiscal year 2022–23, which staff asserted would compensate for that year’s allocation for salary adjustment. Increasing recruitment would reduce the size of this savings. Although some recruitment is likely inevitable—for example, recruiting some additional police officers to reduce overtime—taking a measured approach to filling vacancies will allow the city the time to determine whether any departments, including police and fire, should or could operate with a smaller staff and thereby allow the city to eliminate vacant positions. For example, in fiscal year 2021–22, staff reported that eliminating 12 vacant positions in the police department saved $3 million from the police budget. The finance director has stated, that in some departments, high vacancy rates have limited operations and efficiency. Nevertheless, by assessing its staffing needs, the city may find other departments that need fewer additional staff than their vacancies would suggest.

Please refer to the section beginning on page 3 to find the recommendations we have made to address this area of risk to the city.
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Blank page inserted for reproduction purposes only.
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The City Has Mismanaged the Richmond
Housing Authority
A Decade of Mismanagement Will Result in the Housing Authority Transferring Its Public Housing Responsibilities to Other Entities
The city has ineffectively managed the finances of the housing authority for a decade and, as a result, HUD—the federal oversight agency for local housing authorities—has directed the housing authority to transfer its programs and resources to other entities. The housing authority is a separate legal entity from the city. The city manager acknowledges that the city manages the authority’s finances but could provide no agreement between the city and the housing authority other than the city council’s approval of the authority’s budget. This included a general fund subsidy that provided $800,000 of its $4.8 million annual revenue in fiscal year 2021–22. Despite this support and assistance, the housing authority has failed to comply with basic financial requirements and best practices. This has increased the risk that neither the city, the housing authority, nor the public may be aware of the housing authority’s actual financial condition.

Most importantly, the housing authority has not completed since fiscal year 2016–17 annual financial audits required by state and federal law. In July 2022, housing authority staff requested that the authority board and the city approve a contract amendment with the authority’s financial services contractor to support the housing authority’s auditors in completing their work. According to the housing authority’s executive director, Richmond has not dedicated sufficient financial staff who are trained in federal requirements to the housing authority. City staff acknowledged in November 2018 that the city had not completed the necessary tasks to know the authority’s financial position, such as being able to provide bank reconciliations. As of October 2022, the audits remain incomplete.

The lack of audited financial statements for the housing authority has in turn affected Richmond’s financial reporting. From fiscal year 2016–17 to the most recent audited financial statements in fiscal year 2020–21, the city’s auditors noted that they could not obtain sufficient appropriate evidence to provide an audit opinion on the financial statements for Richmond’s businesslike activities, which include the housing authority.

Because the housing authority has not completed its annual financial audits since fiscal year 2016–17, neither it, the city, nor those that the authority or the city serve can be confident in the authority’s finances and its potential effects on the city.

In fiscal year 2020–21, Richmond also decided to not seek repayment for the costs of services provided to the housing authority because the expenses did not meet federal requirements. In 2021, a HUD consultant reviewed the city’s 2019 audited financial statements and found that Richmond claimed that the housing authority owed it more than $15 million for services rendered, including nearly $5 million in indirect cost allocations.

According to the HUD consultant, federal law disallowed nearly all—$14.7 million—of 23 CALIFORNIA STATE AUDITOR
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those claimed expenditures. In 2022 the city decided to withdraw its claim for these expenses and was required to write off its claim to these funds before completing its fiscal year 2020–21 financial statements.

As a result of these and other instances of financial mismanagement and in response to HUD concerns, the housing authority is planning to transfer its housing programs and resources to other agencies and partners. As Figure 6 indicates, HUD identified significant deficiencies concerning the housing authority’s financial practices, oversight, documentation, and accountability going back more than a decade. For example, in its 2009 audit, HUD found that the housing authority had issued payments for services related to the management of housing units without determining whether the invoiced amounts were appropriate. In a subsequent audit in 2016, HUD found that the housing authority had misled HUD on the status of its financial resources, submitted falsified documentation, and allowed the city to use the housing authority’s HUD funds. It also found that the city had charged the housing authority for rent and services at prices that seemed excessive. HUD found that these actions resulted in more than $2 million in misspent HUD funds and nearly another $1 million in costs the housing authority could not support. The housing authority had also incurred other questionable transactions that unnecessarily limited its resources and the effectiveness of its public housing program.

Further, in its annual evaluations of public
housing performance, HUD has regularly
found the housing authority to be deficient.

In these reviews HUD assesses and scores the
performance of public housing agencies based
on the indicators noted in the text box. For
the nine years from 2011 through 2019, HUD
designated the housing authority as below
HUD standards in seven of those years. From
2017 through 2019, HUD found the authority
to be well below standards.

As a result of the consistently poor reviews, in
2019 HUD created and the housing authority
signed a recovery agreement with the intent,
according to HUD, to bring about the transfer
of the housing authority’s direct public
housing responsibilities to other agencies and
partners. Richmond acknowledged this agreement by the signature of its mayor and agreed to work in good faith to assist the housing authority and HUD in accomplishing the tasks in the agreement, many of which are described in the next section. This process, when complete, will result in the housing authority no longer directly providing housing because private entities will rehabilitate and manage its real property under long-term leases. The housing authority’s role will be reduced to overseeing the lease agreements. The housing authority’s partners will ultimately maintain the existing public housing in the future, but the housing authority’s delays in completing the recovery agreement—and the associated delays in maintenance and rehabilitation of affected housing units—are negatively affecting Richmond residents who currently rely on that public housing.

HUD Performance Indicators
Physical Condition Indicator—Reviews
whether the housing is decent, safe, sanitary,
and in good repair.

Management Operations Indicator—
Measures occupancy, tenant accounts
receivable, and accounts payable.

Financial Condition Indicator—Determines
whether sufficient financial resources exist to
support the provision of housing.

Capital Fund Program Indicator—Determines
whether funds are obligated and units
occupied within program grant deadlines.

Source: Federal law.
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Figure 6
HUD Has Repeatedly Identified Mismanagement of the Housing Authority After its 2009 audit of the housing
authority, HUD designated the
housing authority as a
TROUBLED AGENCY.

Deﬁcient ﬁnancial practices—such as releasing
payments without supporting documentation.

Failures in oversight—allowing payments
beyond a contract’s expiration.

Poor documentation practices—such as failing
to keep documents required for procurement
and for tenant ﬁles.

Inadequate accountability—such as:
– Rejecting the results of competitive procurement
processes.
– Staﬀ participating in awarding contracts to entities with whom staﬀ members had a conﬂict of interest.

After its 2016 audit of the housing
authority, HUD again designated
the housing authority as a
TROUBLED AGENCY.

Inadequate ﬁnancial practices and lack of
accountability—exempliﬁed by:
– Submitting documentation that misrepresented the
authority’s ﬁnances.
– Failing to conduct required procurement processes.

Weak oversight—such as:
– Housing authority staﬀ not reviewing and approving
transactions initiated by the city.
– Providing and paying for city staﬀ and services using authority funds without HUD approval.

HUD
HUD’s 2009 audit of the housing authority
found the following: HUD's 2016 audit found the following:

Source: HUD audit reports.

The Housing Authority Missed Mandatory Deadlines to Complete the Recovery Agreement
HUD may seek remedies because the housing authority is not complying with the recovery agreement. The recovery agreement requires the housing authority to meet target dates for 26 individual tasks, such as submitting a financing plan and issuing a request for redevelopment proposals. Due dates range from October 2019 to November 2022. The authority has made some progress in satisfying the terms of the recovery agreement. For example, the authority stated that it transferred to another organization a property that had been vacant since 2015 because it was uninhabitable. However, as of September 2022, the housing authority had missed 11 other deadlines, many by more than a year, as Figure 7 shows. In May 2022, HUD stated in a letter to the housing authority that it will not provide extensions to these 25 CALIFORNIA STATE AUDITOR
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deadlines and will instead seek remedies against the housing authority, including suspension or debarment.9 In July 2022, the housing authority reported to its board that it had not been able to meet required deadlines because of staffing shortages and unspecified "unforeseen cirumstances. ” The housing authority’s executive director also indicated that, although the deadlines were originally reasonable, the pandemic has made the deadlines unreasonable, as each step required additional time to complete.

Figure 7
The Housing Authority Has Failed to Comply With HUD’s Recovery Agreement Deadlines as of September 2022
/two.lf+ YEARS
OCTOBER: Signed recovery agreement with HUD.

OCTOBER: Submit application for Richmond Village 1 & 2 property redevelopment.

APRIL: Submit ﬁnal voucher program closeout audit to HUD.

MA Y: Finalize contract with Nystrom property developer.

SEPTEMBER: Obtain HUD approval for Nystrom property redevelopment application.

NOVEMBER: Submit ﬁnancial plan for Richmond Village 1 & 2 property redevelopment.

DECEMBER: Close conversion of Richmond Village 1 & 2 property to ownership and operation by private developers.

MA Y: Obtain HUD approval for Richmond Village 3 property redevelopment application.

JUNE: Obtain vouchers to ensure continuity for Richmond Village 3 residents as property is transferred to new owner.

DECEMBER: Obtain HUD approval for a redevelopment application for undeveloped Hacienda property parcels.

DECEMBER: Begin construction of Richmond Village 3 redevelopment.

MARCH: Start Nevin Plaza redevelopment.

OVERDUE
2019
2020
2021
2022
/two.lf+ YEARS
/two.lf+ YEARS
/two.lf+ YEARS
/one.lf+ YEARS
/one.lf+ YEARS
/two.lf/six.lf/two.lf DA YS
/one.lf+ YEARS
/one.lf+ YEARS
/two.lf/six.lf/two.lf DA YS
/two.lf/zero.lf/two.lf DA YS
Source: Housing authority documentation.

Note: Overdue total as of September 19, 2022.
9 A suspension is imposed for a temporary period, pending the completion of an investigation or legal proceeding, and it results in an immediate exclusion from participation in further government transactions. A debarment sanction means that an organization and its affiliates are excluded from conducting business with any federal agency. Debarments are imposed for criminal and/or serious HUD program violations. A suspension may lead to debarment. 26 CALIFORNIA STATE AUDITOR
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Avoiding delays in the recovery agreement is critical because it helps ensure that residents have safe housing. Under federal and state law, the housing authority is responsible for ensuring that the housing units it provides are habitable and safe.

However, the housing authority has not always been able to meet HUD’s physical conditions indicator; in 2013, 2014, and 2018, the housing authority scored low enough on this indicator for HUD to require corrective action. Residents of one housing authority building sued the city and housing authority in 2015, listing mold, vermin, faulty elevators, and lax security as some of the conditions they had to endure. The city and the housing authority settled this lawsuit in 2019 for more than $650,000. The housing authority stated that it directly manages about 240 housing units in two complexes as of August 2022 and indicated that, under the recovery agreement, it will sell or transfer all the housing units to other entities.

For example, the housing authority entered into a long-term lease with a developer for the Hacienda development, which will rehabilitate the building and manage it as affordable housing for seniors. Further delays in the housing authority’s implementation of the agreement could result in residents experiencing more problems in their housing and more lawsuits.

The Housing Authority May Owe the Internal Revenue Service $1 Million or More in Taxes and Penalties
The Internal Revenue Service (IRS) claims that the housing authority owes significant taxes and penalties from 2018 and 2019. Federal law requires the housing authority to submit tax information on property owners who receive federal funds through the housing authority—in this case through a housing voucher program—to ensure that those property owners pay the taxes they owe and, in some instances, to withhold taxes and submit them on the property owners’ behalf. The housing authority reported to its board in June 2022 that it had failed to report tax information in 2018 and 2019, and that failure to comply could result in $9 million in withholding taxes and penalties.

The housing authority took no significant action to address this potential liability until the start of this audit. However, it has been able to submit sufficient records so that the IRS agreed to reduce the remaining taxes and penalties to $1 million.

According to the housing authority’s executive director, the city, which provides financial services for the housing authority, had not provided sufficient support or resources to allow it to meet IRS requirements. The city manager indicated that the prior finance director and housing authority executive director were not engaged in the level of detail as the new finance director and executive director. Although the city is not directly liable for these debts, because it provides significant funding to the housing authority, the existence of the outstanding taxes and penalties results in increased risk to Richmond.

Please refer to the section beginning on page 3 to find the recommendations we have made to address this area of risk to the city.
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The City Has Not Consistently Followed
Its Contracting Policies or Updated Its
Fees as Required
Richmond Could Do More to Demonstrate It Is Following Requirements to Ensure the Best Value for Its Contracts
Lack of documentation sometimes makes it difficult for Richmond to demonstrate that it complies with its own contracting policies. The city’s municipal code and its purchasing policy outline requirements that promote fairness and transparency in how it selects vendors. Specifically, for contracts between $5,000 and $50,000, city staff must contact vendors to obtain three written quotes before awarding the contract. For contracts valued at $50,000 or more, the city must follow a competitive bidding process. The municipal code allows for limited exceptions to its requirements for multiple quotes or bids, such as during an emergency or when the city determines it is economical for the city to use the pricing and terms established by another public agency. Such requirements are key measures that help ensure that the city is fairly selecting vendors that provide the best value. However, when we reviewed 10 contracts the city entered into from 2019 through 2021, we identified at least two instances in which the city could not demonstrate that it followed its own procurement policies or it had made errors or omissions that could have affected its management of contracts.

In one example related to a $24,500 contract approved by the city council, Richmond did not justify its use of an alternative contracting process that allows it to purchase supplies, equipment, or services by using the pricing and terms of a contract negotiated by another public agency that has already procured those same goods or services. The municipal code allows Richmond to use this method so long as the finance department determines it would be in the city’s best interest. However, staff did not perform such an analysis and did not explain that Richmond was using this method when reporting the contract to the city council. For another contract originally bid at $63,800, city staff proposed and the city council approved a higher value of $71,200 for the contract without a documented explanation. Inconsistent documentation limits the city’s ability to demonstrate that it is properly procuring goods and services and complying with its own policies.

According to finance staff, staff from other departments typically enter into contracts that the finance staff then approves. The finance department has not required other staff to follow specific formats when submitting related documentation. When we reviewed with the finance department the various documentation issues we identified, staff acknowledged the need for stronger and more consistent contract documentation practices going forward. The finance director also noted that the finance department had enforced more rigid documentation requirements in the past but that turnover in other departments has increased the workload for finance staff because of the need to provide more training. She further explained that the city was implementing a new training program to familiarize other departments’ staff with procurement requirements. 29 CALIFORNIA STATE AUDITOR
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As we discussed earlier, competitive bidding allows the city to demonstrate that it is obtaining goods and services at the appropriate value and selecting vendors without inappropriate influence. When Richmond does not adequately document its adherence to bidding requirements or the use of allowable exceptions to its procurement process, it risks overspending for goods and services.

City Staff Have Not Updated Fee Schedules as Required
Richmond has not consistently updated its service fees, and as a result, it risks incurring general fund costs for each service those fees should cover. The city’s municipal code generally requires the city manager to update the city's fee schedule annually to ensure that fee-supported services, such
as engineering site plan reviews or code
compliance inspections, have fees that
are sufficient to cover the cost of those
services.10 While performing the annual
update, the city must consider components
such as direct costs and overhead, as the
text box describes. The municipal code
also requires that the city’s finance director
propose quarterly to the city council any
adjustments to its taxes and fees based on
the Employment Cost Index (ECI). The ECI
is a federal economic indicator that measures
changes in hourly labor costs to employers.

Despite setting these requirements, the
city has not conducted either updates or
adjustments at the required frequency.

From 2018 through 2022, Richmond did
not review and update the full range of its
existing fees. Richmond performed three partial updates during this period—in 2018, 2020, and 2022. In 2018 Richmond analyzed the costs associated with the services its Planning Division provided and updated the associated fees. However, it updated only a selection of fees from two others of its eight fee-levying departments and divisions: its Water Resource Recovery Division and Library and Community Services Department.

For example, the city updated only six of the 50 fees used by its Water Resource Recovery Division. It made no fee updates for the remaining city departments in 2018 and no fee updates at all in 2019 or 2021. In 2020 Richmond updated certain fees that developers could pay in lieu of constructing affordable housing units within residential development projects, but its updates did not include all fees for the Building Division or any fees for other departments or divisions in the city. Richmond’s 2022 effort was improved but still not complete. At that time, it conducted full fee updates for the police and fire departments and for Code Enforcement, and it updated a selection of 10 The fee schedule requires an annual update for a majority of the fees it lists. However, a small subset of fees, such as those levied for investigating work done without permits, require updates only as needed.

Cost Components for Fee Updates
Applicable Direct Costs, such as wages,
overtime, benefits, services, and supplies.

Applicable Indirect Costs, such as building
and equipment maintenance and operation,
communications and computer expenses.

Overhead, including but not limited to the
distributed costs of the department head
and support staff, and of the city council,
city manager, finance department, and other
staff and support services provided to the
entire city.

Other Costs, including debt service costs and
fixed asset depreciation.

Source: Richmond municipal code.
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fees for departments and divisions, including Community Development and the Library, but it did not conduct fee updates for other departments. Figure 8 provides a summary of Richmond’s fee updates for the eight key departments from 2018 through 2022.

Figure 8
Richmond Has Not Regularly Updated Its Fees and May Not Be Recovering Costs for Related Services Police Department
Fire Department
Library and Community Services
Public Works Engineering Department
Public Works Water Resource Recovery
Community Development Planning Department
Community Development Building Department
Community Development Code Enforcement
2018 2019 2020 2021 2022
The city updated the department’s fees to reﬂect the cost of providing services.

The city updated some but not all of the department’s fees to reﬂect its costs.

The city did not update any of the department’s fees to reﬂect the cost of providing services.

Source: Richmond municipal code and analysis of Richmond city council agenda documents from 2018 through 2022.

Note: The analysis above includes updates to existing fees and does not include the addition of various new fees the city implemented between 2018 and 2022.

Even the fee updates Richmond has completed may be inadequate. We reviewed three of the largest fees Richmond assessed—accounting for 15 percent of Richmond’s assessed fees in fiscal year 2020–21—to determine whether the city was reasonably recovering its costs. The city was unable to provide documentation detailing how it calculated costs related to an engineering permit fee for digging and therefore cannot demonstrate that it is appropriately recovering its costs. Richmond was able to provide documentation partially supporting the reasonableness of the other two fees we reviewed. In 2020 the city updated its building fees related to developing affordable housing based on a fee assessment completed in 2019, and in 2018 it updated its fees for reviews of California Environmental Quality Act filings. However, because it has 31 CALIFORNIA STATE AUDITOR
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not updated these fees in several years, it is unclear whether the updated assessments continue to cover the city’s costs. In fiscal year 2020–21, the city assessed fees of $2.1 million in developer fees and $1.6 million for environmental impact report reviews.

Richmond has also not adjusted its rates and fees for inflation as frequently as is set forth in its municipal code. We found that, from 2018 through 2022, Richmond adjusted its fee schedule to account for inflation on a roughly annual basis while the municipal code requires quarterly adjustments. The city states that it has adjusted its fees annually rather than quarterly for more than a decade because of the labor-intensive nature of fee updates. Although that did not meet the requirements of the municipal code, we estimate that the city’s practice of adjusting its fees annually rather than quarterly resulted in a limited financial impact of $208,000 in 2021, the equivalent of only 0.7 percent of the total fees it collected.

The city indicated that updating its fees on a set schedule has not been feasible because of staffing limitations and the significant amount of labor required to calculate fee increases. The city’s assessment may be reasonable given the staffing issues we identified earlier. The city must balance the time and labor of conducting more frequent updates against any potential lost revenue to determine a reasonable frequency for conducting citywide fee updates, and it should revise its municipal code to reflect its decision on the required frequency of those updates.

Please refer to the section beginning on page 3 to find the recommendations we have made to address this area of risk to the city.

We conducted this audit in accordance with generally accepted government auditing standards and under the authority vested in the California State Auditor by Government Code section 8543 et seq. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on the audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Respectfully submitted,
MICHAEL S. TILDEN, CPA
Acting California State Auditor
November 10, 2022
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APPENDIX A
The State Auditor’s Local High‑Risk Program
Government Code section 8546.10 authorizes the California State Auditor (State Auditor) to establish a local high-risk program to identify local government agencies that are at high risk for potential waste, fraud, abuse, or mismanagement or that have major challenges associated with their economy, efficiency, or effectiveness.

Regulations that define high risk and describe the workings of the local high-risk program became effective on July 1, 2015. Both statute and regulations require that the State Auditor seek approval from the Joint Legislative Audit Committee (Audit Committee) to conduct audits of local entities.

To identify local entities that may be at high risk, we analyze audited financial statements and unaudited pension-related information for more than 470 California cities. This detailed review includes using financial data to calculate indicators that may be indicative of a city's fiscal stress. These indicators enable us to assess each city’s ability to pay its bills in both the short and long term. Specifically, the indicators measure each city’s financial reserves, debt burden, cash position or liquidity, revenue trends, and ability to pay for employee retirement benefits.

In October 2019, we determined that Richmond potentially met the criteria for being at high risk. We conducted an assessment in February 2021 to determine the city’s awareness of and responses to these issues as well as to identify any other ongoing issues that could affect our determination of whether the city is at high risk. After conducting our initial assessment, we concluded that Richmond’s circumstances warranted an audit. We sought and, in June 2021, obtained approval from the Audit Committee to conduct an audit of Richmond.

If a local agency is designated as high risk as a result of an audit, it must submit a corrective action plan. If it has not provided its corrective action plan in time for inclusion in the audit report, it must provide the plan no later than 60 days after the report’s publication. It must then provide written updates every six months after the audit report is issued regarding its progress in implementing its corrective action plan. This corrective action plan must outline the specific actions the local agency will perform to address the conditions causing us to designate it as high risk and the proposed timing for undertaking those actions. We will remove the high-risk designation when we conclude that the agency has taken satisfactory corrective action and the deficiencies in the audit have been satisfactorily addressed. 33 CALIFORNIA STATE AUDITOR
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APPENDIX B
Scope and Methodology
In June 2021, the Audit Committee approved a proposal by the State Auditor to perform an audit of Richmond under the local high-risk audit program. We conducted an initial assessment of Richmond in February 2021 in which we reviewed the city’s finances to determine whether it demonstrated characteristics of high risk pertaining to the following six risk factors specified in state regulations:
• The local government agency’s reported financial condition has the potential to impair its ability to efficiently deliver services or to meet its financial or legal obligations.
• The local government agency’s ability to maintain or restore its financial stability is impaired.
• The local government agency’s financial reporting does not follow generally accepted government accounting principles.
• Prior audits reported findings related to financial or performance issues, and the local government agency has not taken adequate corrective action. • The local government agency uses an ineffective system to monitor and track state and local funds it receives and spends.
• An aspect of the local government agency’s operation or management is ineffective or inefficient; presents the risk for waste, fraud, or abuse; or does not provide the intended level of public service.

Based on our initial assessment, we identified concerns about Richmond’s financial condition and outlook and its debt. The following table lists the objectives that the Audit Committee approved and the methods we used to address them. 35 CALIFORNIA STATE AUDITOR
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Audit Objectives and the Methods Used to Address Them

AUDIT OBJECTIVE METHOD
1 Review and evaluate the laws,
rules, and regulations significant
to the audit objectives.

Identified and reviewed relevant federal and state laws, rules, regulations, municipal code, and other background materials applicable to the city. 2 Evaluate Richmond’s current
financial condition and ability to
meet its short‑term and long‑term
financial obligations while
continuing to provide services to
its residents.
• Developed and analyzed trends of revenues, expenditures, and other relevant financial risk indicators from fiscal years 2016–17 through 2020–21.
• Reviewed the city’s methodology for creating its financial projections and assessed whether those projections are reasonable.
• Assessed the reliability of selected data elements in the city’s financial systems.
• Reviewed the city’s financial statements and accounting records to determine the position of its enterprise funds and the degree to which it has relied on general fund subsidies in the past five fiscal years. 3 Identify the causes of Richmond’s
financial challenges and
determine whether the city has
developed an adequate plan for
addressing those challenges. This
will include assessing the city’s
efforts to improve its financial
condition by increasing revenue
and reducing expenditures.
• Interviewed city staff and reviewed documentation, such as presentations to the city council, to identify underlying revenue and expenditure issues the city believes are contributing to its financial challenges. • Reviewed Richmond’s “Plan 2030, ” financial forecasts and presentations, and related documentation.
• Assessed the extent to which staff compensation contributed to Richmond’s financial challenges by doing the following: reviewed Richmond’s salary survey, budgets, and federal inflation reports to determine when the city last provided cost‑of‑living increases to its staff and to estimate the impact of inflation since that time, compared recent staff salaries in key positions to those in neighboring cities, and reviewed staffing levels for departments with significant vacancies or overtime. • Assessed risks related to the city’s reliance on pension obligation bonds and current refinancing plan based on GFOA guidance and available reports on pension costs. We also reviewed the city’s planning and costs related to its OPEB liabilities.
4 Determine whether Richmond’s
budgeting processes align
with best practices. In addition,
evaluate the city’s procedures
and underlying assumptions for
projecting future revenue and
expenditures, and determine
whether the projections result in
balanced budgets and accurate
financial forecasts.
• Evaluated the policies, processes, and practices the city used to develop its budgets and compared them with applicable criteria and GFOA best practices. We determined that the city complied with its policies, processes, and practices when developing its budget. Further, we determined that Richmond’s budgeting practices comply with GFOA best practices.
• Assessed the reasonability of assumptions used by the city in its revenue and expenditure projections. We reviewed budget and financial records to determine whether the projections resulted in balanced budgets and accurate financial forecasts from fiscal years 2016–17 through 2020–21. 5 Assess Richmond’s process for
setting, increasing, or decreasing
fees or rates to ensure that it
complies with applicable laws,
rules, regulations, and best
practices. For a selection of these
fees and rates, determine whether
they cover the city’s costs of
providing services.
• Reviewed state law, the city’s municipal code, and guidance from GFOA and the California and National Leagues of Cities to identify requirements and best practices for setting municipal fees and rates. • Interviewed staff and reviewed documentation to determine Richmond’s process for setting fees and rates. We determined whether that process complied with state law, the municipal code, and best practices. • Assessed whether city’s fees covered its costs for providing services by reviewing supporting documentation for the rates for three fees. 36 CALIFORNIA STATE AUDITOR
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AUDIT OBJECTIVE METHOD
6 Evaluate Richmond’s efforts
to address the deficiencies its
external auditors identified in their
reports for fiscal year 2018–19
and earlier years and those the
Inspector General identified in
its 2016 report related to the
Richmond Housing Authority.
• Conducted interviews and reviewed the city’s and housing authority’s documentation to determine the progress of the city and housing authority to address associated audit recommendations.
• Conducted interviews and reviewed documentation to assess the housing authority’s efforts to comply with the recovery agreement timeline.

Further, to the extent possible, we assessed the risk to the city associated with missing associated deadlines.
7 Review and assess any other
issues that are significant to the
audit.
• To assess the city council’s compliance with open‑meeting laws related to closed sessions, we reviewed five closed city council meetings held from 2018 through 2021. We had no reportable findings.
• To assess potential conflict‑of‑interest violations, we reviewed statements of economic interest submitted by the city council, mayor, and certain other leadership positions. We had no reportable findings. • Reviewed a selection of 10 contracts from the city’s purchasing database and paper records from 2019 through 2021 to determine whether the city followed its competitive bidding and contract approval requirements, the city received the services procured, and the city made payments in accordance with the contract terms.

Source: Audit workpapers.

Assessment of Data Reliability
The U.S. Government Accountability Office, whose standards we are statutorily obligated to follow, requires us to assess the sufficiency and appropriateness of computer-processed information we use to support our findings, conclusions, or recommendations. In performing this audit, we relied on electronic reports that we obtained from the city’s financial system. We completed data validation, logic, and completeness testing. We found the city’s financial accounting system to be sufficiently reliable for the purpose of reviewing its financial condition. 37 CALIFORNIA STATE AUDITOR
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*
* California State Auditor’s comment appears on page 43. 39 CALIFORNIA STATE AUDITOR
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1 41

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Comment
CALIFORNIA STATE AUDITOR’S COMMENT ON THE RESPONSE FROM

THE CITY OF RICHMOND
To provide clarity and perspective, we are commenting on Richmond's response to the audit. The number below corresponds to the number we have placed in the margin of Richmond's response.

The city’s assertion that, in the past, it did not meet minimum reserve policy targets does not align with its financial reports and policies. Richmond’s fiscal year 2020–21 reserve policy identified several types of funds that the city considered part of its reserve. Based on this policy, the city exceeded its fiscal year 2020–21 reserve target and may have been able to contribute up to $6.5 million to its OPEB trust fund. However, as we indicate on page 19, city staff did not conduct a thorough analysis of whether—under its then existing policy— these funds should have been placed in its OPEB trust fund and thus the city may have missed an opportunity to shore up this area of financial risk. 1 43

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Request for Proposals
Workforce Analysis
Release Date: February 17, 2023
Deadline for Submittal
5:00 PM PST
March 17, 2023
Contact: Nickie Mastay, Deputy City Manager
Email: [email protected]
Phone Number: (510) 620-6609
City of Richmond
City Manager’s Office
946

INTRODUCTION
The City of Richmond (City) is requesting proposals from qualified professionals to perform a workforce analysis.

This request for proposal (RFP) describes the required scope of services, the selection process, and the minimum information that must be included in the proposal. Failure to submit the information in accordance with the RFP requirements and procedures is cause for disqualification. The anticipated term of this contract will be for a period of one year with an option to renew for an additional year with mutual agreement of both parties.

Qualified professionals are required to read and understand all information contained within this entire proposal package. By responding to this RFP, the qualified professional agrees that they have read and understand these documents.

ABOUT THE CITY
The City of Richmond was chartered as a city in 1909, and is located 16 miles northeast of San Francisco, directly across the San Francisco Bay. Richmond’s population is 116,448. The City is a Charter City and operates a Council-administrator form of government consisting of six (6) council members and a mayor. There are six (6) districts in the City of Richmond with the Mayor elected at-large.

The City of Richmond provides a full range of municipal services including police and fire protection; construction and maintenance of highways, streets, and infrastructure; library services; storm water and municipal sewer systems; operation of a wastewater treatment facility; and the administration of recreational activities and cultural events.

The City also operates the Richmond Memorial Convention Center and the Port of Richmond.

To become better acquainted with the City, please visit the City’s website at http://www.ci.richmond.ca.us.

SCOPE OF SERVICES
On April 4, 2022, the City of Richmond was notified by the California State Auditor that they would be conducting an audit of the City as approved by the Joint Legislative Audit Committee on June 30, 2021. The Audit was initiated in May 2022 and was completed and published on November 10, 2022. City staff members provided the State Auditor’s Office with full access to financial data and systems per their request.

The State Auditor issued a total of 11 recommendations regarding various areas of concern. One of the recommendations is to provide a Workforce/Position Analysis.

The State Auditor described this as follows:

To mitigate the costs of increasing salaries. The City should perform a Workforce Analysis. Based on the results of the analysis, the City Council should consider eliminating vacant positions that it deems no longer necessary. Additionally, the City 947
should assess its need for each vacant position before it seeks to fill the positions and eliminate any positions that is does not need.

The selected qualified professional will be responsible for working with City staff to develop a detailed plan that includes succession planning and recommendations not only for vacant positions, but for the proper position for succession planning to be effective for City in the coming years. Specific activities include:
x Reassess the Size of City Staff: Meet with Department Directors via the City Manager and Human Resources Director to assess staffing needs to determine if the department needs fewer allocated staff than their vacancies would suggest.
x Succession Planning and Vacancies: The City would like to take a measured approach to filling vacancies. By taking a measured approach to filling vacancies, this will allow the City time to determine whether any departments, including Police and Fire, should or could operate with a smaller staff. While taking a measured approach to filling vacancies there needs to be an analysis of potential retirements to determine proper succession planning.
x Department Analysis: Facilitate a variety of meetings between/among Department Directors to determine current workflow with the current staff in each division of each department to determine if the department is operating at optimum accuracy and efficiency. Produce a written document that summarizes this analysis with recommendations on improvements to workflow and staffing.

Responsive materials should be submitted no later than the close of business, 5:00 p.m. Friday, March 17, 2023.

RFP SCHEDULE
Date Activity
February 17, 2023 Release RFP
March 1, 2023 Final Day to Submit Questions (5:00 p.m.) March 17, 2023 RFP Due Date
April 2023/May 2023 Evaluation of proposals/Interviews of Respondents June 2023 Effective Date of Contract
948

PROPOSAL FORMAT GUIDELINES
The proposal should be concise, well-organized, and demonstrate the proposer’s qualifications and experience applicable to the Project. The proposal shall be limited to no more than10 double-sided pages (8.5 inches x 11 inches), inclusive of graphics, forms, pictures, photographs, dividers, etc. but not of cost proposal, resumes, required forms, certifications, front and back covers, or letters of commitment from sub- consultants. The required font size is 12 point, with minimum left and right margins of one-inch, and top and bottom margins of 0.7 inches.

Each proposal will adhere to the following order and content of sections. Proposal should be straightforward, concise, and provide “layman” explanations of technical terms that are used. Emphasis should be concentrated on conforming to the RFP instructions, responding to the RFP requirements, and providing a complete and clear description of the offer. Proposals, which appear unrealistic in the terms of technical commitments, lack of technical competence, or are indicative of failure to comprehend the complexity and risk of this contract, may be rejected. The following proposal sections are to be included in the Respondent’s response:

A. Respondent Cover Letter
A cover letter, not to exceed three (3) pages in length, should summarize key elements of the proposal and shall:
x Confirm that all elements of t his RFP have been reviewed and understood;
x Include a statement of intent to perform the services as outli ned; x Express company’s willingness to enter into an agreement under the terms and conditions prescribed by this RFP, insurance requirements (Attachment 1), Sanctuary City Compliance Statement (Attachment 2), and in the sample Standard Service Agreement (Attachment 3); x Submit a written description and brief history of the company’s experiences, qualifications, and successes in providing California services described herein. Please indicate the number of employees, client base and location of offices;
x Indicate the address and telephone number of the Respondent’s office located nearest to Richmond, California and the office from which the project will be managed;
x Confirm that Respondent has a min imum of three (3) years verifiable California experience;
x Stipulate that the proposal pr ice will be valid for a period of at least 180 days;
x Identify a single person for cont act during the RFP review process; and x Cover letter shall be signed by an authorized official of the company. 949
B. Background and Project Summary Section
The Background and Project Summary Section should describe your understanding of the City, the work to be done, and the objectives to be accomplished. Refer to description of services for this RFP.

C. Methodology Section
Provide a detailed description of the approach and methodology to be used to accomplish the Scope of Services of this RFP. The Methodology Section should include:
1) An implementation plan that d escribes in detail (i) the methods, including controls by which your firm manages projects of the type sought by this RFP; (ii) methodology for soliciting and documenting views of internal and external stakeholders; (iii) and any other project management or implementation strategies or techniques that the respondent intends to employ in carrying out the work.
2) Detailed description of effo rts your firm will undertake to achieve client satisfaction and to satisfy the requirements of the "Scope of Services" section.
3) Detailed project schedule, i dentifying all tasks and deliverables to be performed, durations for each task, and overall time of completion. 4) Detail how your firm conducts meetings with City Council and staff (all with different backgrounds) to get to twelve top priorities. 5) Detailed description of spec ific tasks you will require from City staff.

Explain what the respective roles of City staff and your staff would be to complete the tasks specified in the Scope of Services.

D. Staffing and Timeline
Describe the proposed Project team organization, including identification and responsibilities of key personnel. Include resumes of the Project team assigned to this project. Indicate role and responsibility of prime consultants and all sub- consultants. If applicable, indicate how local firms are being utilized to ensure a strong understanding of state and local laws, ordinances, regulations, policies, requirements, and permitting.

Provide a proposed approach with projected timeline (including retreats and workshops) to conduct and complete the scope of work.

E. Firm Qualifications
The information requested in this section should describe the qualifications of the firm, key staff, and sub contractors performing projects within the past five (5) years that are similar in size and scope to demonstrate competence to perform 950
these services. Information shall include:
1) Key staff that participated on named projects and their spec ific responsibilities with respect to this scope of service. 2) A summary of your firm’s demo nstrated capability, including length of time that your firm has provided the services being requested in this Request for Proposal.
3) Provide at least three (3) references that received similar services from your firm in the past three (3) years. The City of Richmond reserves the right to contact any of the organizations or individuals listed.

Information provided shall include:
a) Client Name and contact info
x Telephone & e-mail address
x Address
b) Description of services provided including contract amount c) Project start and end dates
F. Cost Information
Provide the total direct and indirect costs to complete all tasks identified in the scope of services. Even if the method of payment to proposer will be a fixed fee, a detailed cost breakdown shall be provided identifying:
1) The number of staff hours and hourly rates for each professional and administrative staff person who will be available to the City; 2) All other direct costs, such as materials and reproduction costs; and 3) Sub-consultant services, if needed.

If project work exceeds one-year period, indicate if the proposed rates are fixed for this entire time frame or specifically include how the rates will be adjusted in subsequent years. These rates will also be used to negotiate costs for other projects (including optional tasks) that may be assigned. No additional funds will be paid above and beyond the original quote given by the selected Respondent.

G. Value Added Services
Please provide any additional services of benefit not specifically required herein, which the Respondent offers to provide.

H. Respondent Assignment of Sub-Contract
The resulting contract shall not be assigned, transferred, or sublet, in whole or in part, without the prior written approval of the City of Richmond. If Respondents intend to subcontract any portion of the resulting contract, they must describe their process for selecting such subcontractor(s) and the quality control measures that the Respondent will employ to ensure that any subcontractor complies with the provisions of Respondent’s contract with the City. 951
I. Previous Contracts with the City of Richmond
The Respondent shall submit a list which indicates all prime contracts and/or amendments awarded to the proposer by the City of Richmond for the last three (3) years. The list shall include a short description of the Project, the Project scope of work, award date, completion date, name of the City of Richmond’s assigned Project Manager, and contract value.

J. Exceptions to this Request for Proposals
The Respondent shall state whether or not it takes exception(s) to this RFP, including but not limited to the City of Richmond’s Standard Services Agreement (Attachment 3). If the Respondent does take exception(s) to any portion of the RFP or contract, the specific portion to which exception(s) is taken must be identified by section number and explained. Requests for changes or additions to sections of City of Richmond’s Standard Services Agreement must be shown by requesting deletion of specific words and/or by providing new requested contract language. Requests for complete replacement of the City of Richmond’s Standard Services Agreement for another contract will not be granted. Failure to make exceptions to the RFP or Standard Services Agreement within the proposal will be deemed a waiver of any objection. Exceptions will be considered during the proposal evaluation process.

K. Statement of Impartiality and Disclosure
The nature of this Project requires an impartial unbiased approach on the part of the Respondent’s team. This proposal shall include a statement declaring that the Respondent’s and sub-consultants are not currently, and will not, during the performance of these services, participate in any other similar work involving a third-party with interests currently in conflict or likely to be in conflict with City of Richmond’s interests. Additionally, proposer is required to disclose any pending or active investigations or litigation that may affect the reputation or ability of the proposer to carry out the Project.

QUESTIONS CONCERNING REQUEST FOR PROPOSALS
All must be submitted via the electronic BidsOnline system on the Q &A tab by March 1, 2023 - 5:00 p.m. PST. If City finds it necessary to issue an addendum, prospective Respondents will receive notification of addendum.

Otherwise, answers to questions received will be provided the Q&A tab and notification will be It is the proposer’s responsibility to periodically check the BidsOnline website www.ci.richmond.ca.us/bids for any possible Addenda to the RFP that may have been posted.

Any party submitting a proposal shall not contact or lobby any City Council member, City official, employee (except those specified for contact) or agent regarding the RFP.

Any party attempting to influence or circumvent the RFP, bid submittal, and review process shall have their proposal rejected for violating this provision of the RFP. 952
Interested parties may download copies of the abovementioned proposal by visiting the City's web site, www.ci.richmond.ca.us/bids. To download the RFP, new Respondents will be required to register. Once the Respondent downloads any documents relative to a solicitation, that Respondent's name will appear on the Prospective Bidders list for that project and will receive any addenda or notifications relating to the RFP.

PROCESS FOR SUBMITTING PROPOSALS
Electronic Proposals shall be submitted via the City’s secure online bidding system. All required sections of the proposal must be submitted via the website. Respondent is solely responsible for “on time” submission of their electronic proposal. The Bid Management System will not accept late proposals and no exceptions shall be made.

Respondents will receive an e-bid confirmation number with a time stamp from the Bid Management System indicating that their proposal was submitted successfully. The City will only receive those proposals that were transmitted successfully. The proposal must be received no later than 5:00 p.m. PST, on March 17, 2023. The proposal and any required certifications shall be signed by an individual or individuals authorized to execute legal documents on behalf of the Respondent.

GENERAL GUIDELINES
This RFP does not commit the City of Richmond to award a contract, to defray any costs incurred in the preparation of a proposal pursuant to this RFP, or to procure or contract for work. The City of Richmond may reject a proposal without providing the reason(s) underlying the declination. A failure to award a contract to the proposer with the lowest cost proposal shall not constitute a valid cause of action against the City of Richmond. The City shall not be responsible for work done, even in good faith, prior to final approval of the proposed contract. The City may investigate the qualifications of any respondent under consideration, require confirmation of information furnished by the respondent, and require additional evidence or qualifications to perform the Services described in this RFP.

The City reserves the right to:

1. Reject any or all proposals.

2. Issue subsequent Requests for Proposal.

3. Postpone opening for its own convenience.

4. Remedy technical errors in the Request for Proposal process.

5. Negotiate with any, all, or none of the Respondents.

6. Solicit best and final offers from all or some of the Respondents.

7. Select one or more Respondents.

8. Accept other than the lowest proposed fees.

9. Waive informalities and irregularities in proposals. 953
Public Records
All proposals submitted in response to this RFP become the property of the City of Richmond and public records and, as such, may be subject to public review. Documents protected by law from public disclosure will not be disclosed by the City of Richmond if clearly marked with the word "confidential" on each applicable page. Trade secrets may be marked as confidential only to the extent they meet the requirements of California Government Code section 6254.7. Only information claimed to be a trade secret at the time of submittal to the City of Richmond and marked as "confidential" will be treated as a trade secret.

Insurance Requirements
The City of Richmond requires consultants doing business with it to obtain insurance, as shown in RFP Attachment 1. The required insurance certificates must comply with all requirements of the standards as shown and must be provided within fifteen (15) days of issuance of the Notice of Intent to Award and prior to the commencement of any work on the Project.

Business Licenses
The successful Respondent and all subcontractors used in the work will be required to hold or to obtain a City of Richmond business license for which the fee will not be waived.

Compliance with City Ordinances
The contractor and all subcontractors shall comply with the City of Richmond Nondiscrimination Clauses in City Contracts Ordinance (Richmond Municipal Code (RMC) Chapter 2.28), Business Opportunity Ordinance (RMC Chapter 2.50), Local Employment Program Ordinance (RMC Chapter 2.56), Living Wage Ordinance (RMC Chapter 2.60) and Ordinance Banning the Requirement to Provide Information of Prior Criminal Convictions on all Employment Applications (“Ban the Box”) (RMC Chapter

2.65), which are incorporated into the Contract Documents by this reference.

Sanctuary City Contracting Ordinance (SCCO)
The Richmond Sanctuary City Contracting Ordinance No. 12-18 prohibits the City from granting and or retaining contracts with any person or entity that provides Data Broker or Extreme Vetting services to the U.S. Immigration and Customs Enforcement Division of the United States Department of Homeland Security (“ICE”). Bidders/Proposers must submit the Sanctuary City Compliance Statement (Attachment 2) with their Bid or Proposal.
954
Collusion
By submitting a proposal, each respondent represents and warrants that its proposal is genuine and not false or collusive or made in the interest of, or on behalf of any person not named therein; that the respondent has not directly or indirectly induced or solicited any other person to submit a false proposal, or any other person to refrain from submitting a proposal; and that the respondent has not, in any manner, sought collusion to secure any improper advantage over any other person submitting a proposal.

Withdrawal of Proposals
A respondent may withdraw their proposal before the expiration of the time for submission of proposals by delivering to the Finance Department a written request for withdrawal signed by, or on behalf of, the respondent.

Ownership of Documents
All reports, studies, information, data, statistics, forms, designs, plans, procedures, systems, and any other materials produced for the Project shall be the sole and exclusive property of the City. No such materials or properties produced in whole or in part for the Project shall be subject to private use, copyrights, or patent rights by Respondent in the United States or in any other country without the express written consent of the City. The City shall have unrestricted authority to publish, disclose (except as may be limited by the provisions of the Public Records Act), distribute, and otherwise use, copyright or patent, in whole or in part, any such reports, studies, data, statistics, forms or other materials or properties produced for this project.

PROPOSAL EVALUATION AND SELECTION PROCESS
All proposals shall be reviewed to verify that the Respondent has met the minimum requirements. Proposals that have not complied with requirements, do not meet minimum content and quality standards, or take unacceptable exceptions to the General Terms and Conditions of the Service Agreement, will be eliminated from further consideration. Proposals will be reviewed and evaluated by an evaluation committee comprised of City of Richmond personnel.

The City also reserves the right to require modifications follow up with requests for additional information, including, but not limited to, follow up interviews. The City may request Best and Final offers based upon improved understanding of the offers or changed scope of service. The City will negotiate with that respondent to determine final pricing and contract form. Because this proposal is negotiable, all pricing data will remain confidential until after award is made, and there will be no public opening and reading of Proposals. Overall responsiveness to the RFP is an important factor in the evaluation process. The criteria upon which the evaluation of the proposals will be based include, but are not limited to, the following:
x Quality, clarity, and responsiveness of proposal. (15%) x Experience of key individual(s) assigned to the contract. (15%) 955
x Experience of firm in performing this type of service. (15%) x References from clients for w hom similar work was performed. (15%) x Project schedule and depth of st aff available to perform services. (10%) x Ability to meet the needs of City. (10%)
x Understanding of services to be provided and ability to provide requested services. (10%)
x Cost. (10%)
Interview/presentations
Upon request of the City of Richmond, Respondents may be requested to give an oral presentation/demonstration on the proposal, which would include a detailed analysis of how each of the RFP requirements would be addressed should Offeror receive the award. An in-person presentation is preferred but City staff will work with the vendor to determine what is feasible. The demonstration shall be conducted at no cost to the City.

The purpose of the presentation is to verify the vendor’s capability, suitability, and adaptability to the performance requirements stipulated in this solicitation.

The City will schedule the interview date, time, and location with the successful finalists.

If the vendor fails to participate in the interview on the specified date stipulated, the City may elect to reject the proposal or to re-schedule at its discretion.

Respondents are not guaranteed an opportunity to have an interview. Respondents may be eliminated from consideration based solely on inability to meet minimal requirements and/or review of written proposals. The City shall be the sole judge of the acceptability of the proposal in conformance with the specifications and its decision shall be final.

If required these presentations will take place at the following location:

City of Richmond
450 Civic Center Plaza
Richmond, CA 94804
If special accommodations are required in order to attend a site visit, contact at [email protected], no later than three (3) days before the event.

Pre-Award Negotiations
After the proposals are opened, but prior to award, the City may elect to conduct negotiations with the highest ranked respondents for purposes of:
x Resolving minor differences and information
x Clarifying necessary deta ils and responsibilities
x Emphasizing important issues and points
x Receiving assurances from respondents
x Cost/budget clarifications
956
Selection may be made without further discussion, negotiations, or Respondent’s presentations; therefore, Respondent shall offer the most favorable terms in response to this RFP. Respondent must demonstrate an understanding of the scope of service to be provided and the ability to accomplish the tasks set forth. Respondent shall include information that will enable the City to determine the Respondent’s overall qualifications.

The City reserves the right to request additional information or clarification on any matter included in the proposal response, to enable the City to arrive at a final award decision.

Award
When the Review Panel has completed its work, City staff will then recommend the award to the City Manager for approval. The award of a contract to the successful respondent will be at the discretion of the City Manager/City Council. The services provided by the successful bidder shall be governed by a Standard Services Agreement (Attachment 3).

Attachment 1: Insurance Certificate
Attachment 2: Sanctuary City Compliance Statement
Attachment 3: Standard Services Agreement
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Workforce Analysis RFP

REQUEST FOR PROPOSAL RATING MATRIX
RFP Rating Matrix 4-11-23 Rater 1Rater 2Rater 3Rater 4TOTAL Koff & Associates 76 95 81 75 327
Raftelis 70 78 77 79 304
Interview Rating Matrix 4-24-23 Rater 1Rater 2Rater 3Rater 4TOTAL Koff & Associates 76 50 85 83 294
Raftelis 85 70 90 90 335
TOTAL SCORES Rater 1 Rater 2 Rater 3 Rater 4 TOTALRank
Koff & Associates 152 145 166 158 621 2
Raftelis 155 148 167 169 639 1
995

CITY OF RICHMOND

STANDARD CONTRACT

Department: Project Manager:

Project Manager E-mail:

Project Manager Phone No:

PR No: Vendor No: P.O./Contract No:

Description of Services:

The parties to this STANDARD CONTRACT do mutually agree and promise as follows:

1. Parties. The parties to this Contract are the City of Richmond (herein referred to as the “City”) and the following named Contractor:

Company Name:

Street Address:

City, State, Zip Code:

Contact Person:

Telephone: Email:

Business License No: / Expiration Date:

A California [ ] corporation, [ ] limited liability corporation [ ] general partnership, [ ] limited partnership, [ ] individual, [ ] non-profit corporation, [ ] individual dba as [specify:] , [ ] other [specify:]

2. Term. The effective date of this Contract is and it terminates unless terminated as provided herein.

3. Payment Limit. City’s total payments to Contractor under this Contract shall not exceed $ . City shall not pay for services that exceed the Contract Payment Limit unless a contract amendment has been approved by the City Council or City Manager.

4. Contractor’s Obligations. Contractor shall provide those services and carry out that work described in the Service Plan (Exhibit A) which is attached hereto and is incorporated herein by reference, subject to all the terms and conditions contained or incorporated herein.

5. City's Obligations. City shall make to the Contractor those payments described in the Payment Provisions (Exhibit B) which are attached hereto and are incorporated herein by reference, subject to all the terms and conditions contained or incorporated herein.

996

6. Authorized Representatives and Notices. This Contract is subject to the Authorized Representatives and Notices Provisions (Exhibit C) which are attached hereto and are incorporated herein by reference.

7. General Conditions. This Contract is subject to the General Conditions (Exhibit D) which are attached hereto and are incorporated herein by reference, subject to all the terms and conditions contained or incorporated herein.

8. Special Conditions. This Contract is subject to the Special Conditions (Exhibit E) (if any) which are attached hereto and are incorporated herein by reference, subject to all the terms and conditions contained or incorporated herein. (Note:
other than Public Works contracts, the City will agree to Special Conditions only in unusual circumstances.)

9. Insurance Provisions. This Contract is subject to the Insurance Provisions (Exhibit F) which are attached hereto and are incorporated herein by reference.

10. Signatures. These signatures attest the parties' Contract hereto:

CITY OF RICHMOND CONTRACTOR:
a municipal corporation

By:
(* The Corporation Chairperson of the Board,
President or Vice President should sign below)

Title: By:

I hereby certify that this Contract Title:
has been approved by City Council.

Date Signed:

B y :

City Clerk
(* The Corporation Chief Financial Officer,
Secretary or Assistant Secretary should sign below)
Approved as to form:

B y :

B y : T i t l e :

City Attorney
Date Signed:

(NOTE: Pursuant to California Corporations
Code Section 313, if Contractor is a corporation
or nonprofit organization, this Contract (1) must
be signed by (a) the Chairperson of the Board,
President or Vice-President
and (b) the
Secretary any Assistant Secretary, the Chief
Financial Officer or any Assistant Treasurer.

LIST OF ATTACHMENTS:

Service Plan Exhibit A
Payment Provisions Exhibit B
Authorized Representatives and Notices Exhibit C
General Conditions Exhibit D
Special Conditions Exhibit E
Insurance Provisions Exhibit F
Standard Contract/EJ/TE 9-26-07
997
For the Contract between the City of
Richmond and

EXHIBIT A

SERVICE PLAN

Contractor shall, to the satisfaction of the , perform the following services and be compensated as outlined below:

998
City of Richmond
Workforce Analysis
PROPOSAL / MARCH 17, 2023
Attachment A
999

Table of
Contents
A. Respondent Cover Letter .............. 1
B. Background and Project Summary
Section ................................................ 3 C. Methodology Section .................... 4
D. Staffing and Timeline .................... 7
E. Firm Qualifications ........................ 8
F. Cost Information .......................... 11
G. Value Added Services ................. 12
H. Respondent Assignment of Sub-
Contract ............................................ 13 I. Previous Contracts with the City of
Richmond .......................................... 14
J. Exceptions to this Request for
Proposals .......................................... 14 K. Statement of Impartiality and
Disclosure ......................................... 16 Appendix A: Resumes ..................... 17
Appendix B: Required Form ............ 39

Making our world better
The Raftelis Charitable Gift Fund
allocates profits, encourages
employee contributions, and
recognizes time to charitable
organizations that support:
• Access to clean water and
conservation
• Affordability
• Science, technology, and
leadership

Raftelis is investing in improved
telecommunication technologies
to reduce the firm’s number one
source of carbon emissions—
travel.

Diversity and inclusion are
an integral part of Raftelis’
core values.

We are committed to doing our
part to fight prejudice, racism,
and discrimination by becoming
more informed, disengaging with
business partners that do not
share this commitment, and
encouraging our employees to
use their skills to work toward a
more just society that has no
barriers to opportunity.
1000
RAFTELIS 1

445 S. Figueroa Street, Suite 1925, Los Angeles, CA 90071 | www.raftelis.com A. RESPONDENT COVER LETTER

March 17, 2023

Ms. Nickie Mastay, Deputy City Manager
City of Richmond
450 Civic Center Plaza
Richmond, CA 94804

Subject: Proposal for Workforce Analysis

Dear Ms. Mastay:

We are pleased to submit this proposal for a Workforce Analysis for the City of Richmond (City). Our focus has always been to help local government clients solve their financial, organizational, and technology challenges. We appreciate the opportunity to submit our proposal, which has been developed to provide the City with concise yet thorough information that introduces our approach to staffing analyses.

Raftelis was established in 1993 to provide financial and management consulting services of the highest quality to local governments and utilities and has been performing staffing and workload studies since 2010. The Raftelis brand strengthened with the 2020 acquisition of The Novak Consulting Group (TNCG), which deepens our management consulting expertise specific to local governments. We believe our firm offers the City several distinct advantages:

• A workable and insightful approach: Our team’s approach specifically addresses the City’s needs and will help develop a best practice-level plan to align staffing in City departments with current and projected future workload needs. The City’s desire for gained organizational/operational efficiencies and effectiveness is the exact type of consulting work our firm performs.

• An experienced team who knows challenges and opportunities faced by local governments: We are skilled professionals with direct experience in all facets of local government and utility operations. We work solely for local governments and utilities, and many of our team members were local government leaders in some of the best organizations across the country. Our team members understand what is 1001
RAFTELIS 2

445 S. Figueroa Street, Suite 1925, Los Angeles, CA 90071 | www.raftelis.com required to deliver effective public services. Our project manager is located in Los Angeles and familiar with California local government, having served herself.

• Personal service from senior-level consultants: You appreciate it when deadlines are met, phone calls are returned, and your challenges are given in-depth, out-of-the- box thinking. While some firms may assign your business to junior-level people, we offer exceptional service from senior-level consultants.

The proposal price will be valid for a period of at least 180 days. All elements of the City’s RFP have been reviewed and are understood. We intend to perform the services as outlined in this proposal.

We are proud of the resources that we can offer and welcome the opportunity to assist the City in this engagement. If you have any questions, please do not hesitate to contact our Organizational Assessment Practice Lead using the following contact information. She is authorized to represent the firm.

Michelle Ferguson, Vice President – Organizational Assessment Phone: 828.777.6588 / Email: [email protected]
445 S. Figueroa Street, Suite 1925, Los Angeles, CA 90071, 213.262.9300

Sincerely,

Julia Novak
Executive Vice President
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B. BACKGROUND AND PROJECT SUMMARY SECTION
Background and Project
Summary Section
In response to a report by the California State Auditor, the City of Richmond is seeking a professional consultant to assist with a workforce analysis of City departments to determine appropriate staffing levels to maintain current and future service levels, assess the ongoing need for existing vacant positions, and ensure succession planning is maintained.

Our team has extensive experience working with local government clients, including many in California and the Bay Area. Our focus is on providing solutions that work within the available resources and culture of the organizations we assist. The most innovative solutions in the world are valueless if they cannot be implemented. We pride ourselves on our ability to listen, analyze, and work with our clients to find not just a random selection of best practices taken from a manual, but real solutions that can be implemented effectively. We are pleased that our prior engagements have resulted in corresponding actions by our clients to implement the recommendations that we have jointly developed.

One of our strengths is the ability to build on
existing capabilities and resources and to help
organizations see things from a different
perspective. We do this by listening to our
clients and really understanding what they have
to say. We do not operate with a pre-packaged
set of recommendations, and we diligently work
to avoid trying to fit our clients into a standard
mold. We do not offer “cookie cutter”
recommendations but those that are realistic for
implementation in your unique context.

We are excited about the opportunity to assist the City proactively plan and prepare for the future. We understand the importance of respecting the staff who are in place to serve the public and will work collaboratively develop recommendations for improvement. Without this, implementation of recommendations and lasting improvements are not typically successful. We believe this intentional approach, coupled with our extensive expertise in all facets of public operations, makes us uniquely qualified to assist the City on this project within the timeframe requested.
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C. METHODOLOGY SECTION
Project Plan
The project plan provided below was developed to meet the City’s specific goals for this work. Throughout the project, Raftelis will conduct ongoing project management and administration. The Project Director and Project Manager will plan, coordinate, monitor, and control all project tasks in concert with all other appropriate project team members. By keeping all activities coordinated, the team can adhere to the agreed upon project schedule.

Credibility is crucial for building consensus and support for implementing the recommendations of a study. The fastest way for the City to lose credibility with your stakeholders is to provide information that is incomplete or incorrect. The City must have total confidence that the information provided by the consultant is as accurate as possible.

Raftelis has developed a Quality Assurance (QA) process t hat consistently results in accurate deliverables of the highest quality. Each QA process is tailored to the specific project, but there are a number of common elements such as senior -level participation, outside perspective, and involvement from project i nitiation. The QA process that we will implement as part of this project embodies these elements. We have found that a well-defined process ensures that our work products will be of the highest quality and meet or exceed the standards that our clients expe ct from Raftelis.

The success or failure of any consulting engagement is defined by the effectiveness of communications between the client and consultant and among the project team members. A cornerstone of Raftelis’ success is our commitment to regular, fully transparent, and highly effective communications with each client, as well as within our project teams. Our team members are former local government employees who understand the nuance required in the public sector, and we are skilled at communicating in a manner that achieves the project goals.

THE FOLLOWING DETAILS THE PROPOSED WORK PLAN.

Activity 1: Begin and Manage Engagement
We will begin this engagement by conducting a kick-off meeting with the City Manager and Deputy City Manager to discuss the details and expectations of this effort and to finalize the project schedule. We will also discuss the City’s interest in this study, the strengths and weaknesses of current City processes, structure, and operations, and other issues that may be relevant to our work.

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Next, we will meet with the City’s Department Directors as a group to discuss process steps and timeline, and to begin to engage them in the process. We will ask about their perspectives on organizational strengths and opportunities with regard to staffing levels.

Our team will provide the City with a detailed document and data request for relevant background information to inform our work. We will provide a shared online drive into which City staff can easily upload documents. Such documents will include the State Auditor’s Report, City budget, organizational charts, labor agreements, workload volume or annual reports, department work plans, City strategic plans or goals, prior customer surveys (if any), and more.

Throughout the project, we will provide the City with regular project status reports designed to maintain planned project progress and budget, identify and resolve project issues, and review project work products.

DELIVERABLES: Kick-off meeting agenda, draft and final project schedule, and document/data request
Activity 2: Understand Context
In order to understand the City’s current operating context, our team will interview key City staff in each department. We will first meet with each department’s management team to develop a general understanding of operations and, in particular, workload and staffing level concerns. We will discuss potential retirements and future initiatives or workload factors that could impact staffing levels.

Our team will evaluate the organization and its structure to assess its impacts on program operations now and in the future. We will look at both the organizational alignment of the agencies as well as how they integrate with the overall structure of your government. We will assess workflow within and across department divisions to assess workflow efficiency.

Raftelis will prepare a service level matrix which inventories the department’s core services and the current resource level provided by the City, levels of service, current staffing levels (both in-house and contracted), as well as identified strengths, weaknesses, opportunities, and challenges for each service.

DELIVERABLES: Service level matrix
Activity 3: Analyze Staffing
Starting with the service level matrix prepared earlier, we will review each department’s programs against its core services and operational requirements. We will assess and project the workload for each program now and into the future, and identify any gaps between 1005
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desired service levels and current staffing levels. We will analyze staffing ratios, assignments, and workflows. Some of the items to be considered include:

• The use of external contracts/consultants as staff augmentation • The number of vacancies and need for the positions to be filled • Overtime usage
• Succession planning needs
• The ratio of management to non-management staff
• The ratio of administrative support to other staff
• The potential use of technology to automate manual work • Work assignments and division of work across existing staff capacity • Ability to meet performance standards and levels of customer satisfaction

These factors, among others, will be considered to determine the most efficient and effective staffing levels for each work unit in order to meet the City’s desired levels of service.

Activity 4: Prepare Preliminary Observations and
Recommendations
At this point in the project, our project team will have conducted interviews, service level matrix review, staffing level assessment, and data and document review in order to draft preliminary observations and recommendations for the City, including recommended staffing levels for each department.

We will review our preliminary observations and recommendations with department leadership and City management. Based upon feedback received, additional follow-up on issues or analysis will be conducted as needed in order to finalize our recommendations.

DELIVERABLES: Preliminary observations and recommendations Activity 5: Prepare Project Report
Once recommendations are finalized, our team will prepare a comprehensive draft report for the City. The report will include an executive summary, our methodology and approach, and a thorough description of all recommendations for each City department. The draft report will be provided to the City for review and discussion.

Based upon feedback received, we will perform any necessary follow-up work and finalize the report.

DELIVERABLES: Draft and final report
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D. STAFFING AND TIMELINE
Staffing

WE HAVE DEVELOPED A TEAM OF CONSULTANTS WHO

SPECIALIZE IN THE SPECIFIC ELEMENTS THAT WILL BE
CRITICAL TO THE SUCCESS OF THE CITY’S PROJECT.

Our project team is made up of senior-level consultants with direct local government experience. What sets our project team apart is our ability to relate to local community values while at the same time investigating realistic approaches for cost-effective solutions.

An organizational chart of our project team is as follows. Our Project Manager, Rebekka Hosken, is located in Los Angeles and is a former California government employee, familiar with state laws. Several of our team members have performed similar work in California.

No subconsultants are proposed for this work. Resumes for all team members are provided in Appendix A: Resumes.

City of
Richmond

PROJECT DIRECTOR
Michelle Ferguson

STAFF CONSULTANTS
Mark Olson (Lead)
Scott Parker
Ben Kittelson
Claire Pritchard
James Flick
Janae Janik
Colin Stifler

PROJECT MANAGER
Rebekka Hosken

SUBJECT MATTER EXPERTS
Cassandra Deck-Brown
Public Safety and Policing

Tom DeMint
Fire and Emergency Services
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Timeline
A proposed project schedule is provided below, showing a breakdown by project activity.

We expect to refine and finalize this with the City during Activity 1.

E. FIRM QUALIFICATIONS
Who We Are

RAFTELIS AND THE NOVAK CONSULTING GROUP,

HELPING LOCAL GOVERNMENTS AND UTILITIES THRIVE

Local government and utility leaders partner with Raftelis to transform their organizations by enhancing performance, planning for the future, identifying top talent, improving their financial condition, and telling their story. We provide trusted advice, and our experts include former municipal and utility leaders with decades of hands-on experience running successful organizations. People who lead local governments and utilities are innovators— constantly seeking ways to provide better service to the communities that rely on them.

Raftelis provides management consulting expertise and insights that help bring about the change that our clients seek. Raftelis has been in business for 28 years and performing staffing studies for over 13 years.

TNCG is Now Raftelis
The Novak Consulting Group and Raftelis have always shared a focus on delivering lasting solutions for local government agencies. In January 2020, TNCG joined Raftelis. Today, we provide our clients with wide-ranging capabilities and resources in financial, management, technology, and communications consulting for all areas of local government. Our clients Activity 1 - Begin and Manage
Engagement
Activity 2 - Understand Context
Activity 3 - Analyze Staffing
Activity 4 - Prepare Preliminary
Observations and Recommendations
Activity 5 - Prepare Project Report

SEPAPR MAY JUN JUL AUG
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now have the expertise of more than 140 of the country’s leading local government and utility consultants, who have decades of experience. We know that our combined capabilities and resources will provide added value to our clients, and we’re excited about what we can accomplish together.

We believe that Raftelis is the right fit for this project. We provide several key factors that will benefit the City and help to make this project a success.

RESOURCES & EXPERTISE: This project will require the resources necessary to effectively staff the project and the skillsets to complete all of the required components.

With more than 140 consultants, Raftelis has one of the largest local government management and financial consulting practices in the nation. Our depth of resources will allow us to provide the City with the technical expertise necessary to meet your objectives.

In addition to having many of the industry’s leading management and financial consultants, we also have experts in key related areas, like stakeholder engagement and data analytics, to provide additional insights as needed.

DECADES OF COLLECTIVE EXPERIENCE: Our associates and subject matter experts have decades of experience in strengthening local municipalities and nonprofit organizations. They’ve served in a wide range of positions, from city manager to public works director to police chief.

PERSONAL SERVICE FROM SENIOR-LEVEL CONSULTANTS: You
appreciate it when deadlines are met, phone calls are returned, and your challenges are given in-depth, out-of-the-box thinking. While other firms may assign your business to junior-level people, our approach provides exceptional service from senior-level consultants.

NICHE EXPERTISE: Our expertise lies in strengthening public-sector organizations.

We’re consulting specialists rather than generalists, focusing our strengths to do a highly effective job for a specific group of clients.

Experience

RAFTELIS HAS ONE OF THE MOST EXPERIENCED LOCAL

GOVERNMENT FINANCIAL AND MANAGEMENT CONSULTING
PRACTICES IN THE NATION.

Our staff has assisted more than 1,500 local government organizations across the U.S., including some of the largest and most complex agencies in the nation. In the past year alone, Raftelis worked on more than 1,000 financial, management, and/or technology consulting projects for over 600 public-sector agencies in 46 states, the District of Columbia, 1009
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and Canada. Raftelis has assisted hundreds of local governments across the country. In many instances, we have worked with organizations over multiple years and established long-term partnerships to build capacity and lasting improvements throughout an organization. We have become trusted advisors to these local governments, as outlined in the following references.

City of Charleston SC
Reference: Susan Poteat, Director of Process and Service Improvement 80 Broad Street, Charleston, SC 29401
P: 843.577.1381 / E: [email protected]
Project Dates: 2018 – present
Contract Amount: $250,000 (2019 annual contract)
Key Staff: Novak (Project Director), Ferguson (Project Manager), Ingram (Staff Consultant), Kittelson (Staff Consultant), Teal (Staff Consultant), Pritchard (Staff Consultant)

Since 2017, our team has had the privilege of working alongside the City of Charleston (City) under a multi-year contract to conduct a series of organizational and structural assessments as part of the City’s Innovation and Process Improvement initiative.

Projects for the City have largely focused on organizational assessment and improvement, best practices evaluation, benchmarking, and development of future state recommendations to ensure effective and efficient progress toward organizational objectives and excellence in customer service. The Raftelis team has led staff interviews and process improvement exercises, reviewed and recalculated technical review committee submittal fees, and developed clear, actionable, and implementable recommendations for the City of Charleston.

Implementation support was provided where requested. This process continues to provide ongoing support and accountability as the organization moves through the implementation of recommendations. Implementation of key improvement strategies has occurred at many levels throughout the City, allowing the organization to make tremendous progress in instilling a culture of continuous improvement.

Key projects completed to date have included the following:
• Workforce Profile & Employee
Survey
• Technical Review Committee
Process Assessment
• Environmental Services & Fleet
Assessment
• Special Events Process Review
• IT Governance
• Public Services Organization
Structure Assessment
• Parks Department Staffing Study
• Purchasing Review
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• Payroll Process Assessment
• Construction Permitting
Performance Assessment
• Minutes Benchmarking Research
• Housing Substantial Rehabilitation
Process Improvement
• Workforce Profile & Employee
Survey
• Affordable Housing Best Practices
• Fire Marshal Division Assessment

In addition, Raftelis is proud to have developed BRIDGE Academy for the City. BRIDGE Academy is a four-day on-site process improvement and innovation training and development program created for the City of Charleston, SC. The program provides cohort- based training for City staff on process improvement and innovation tools and concepts, developed through an equity lens. BRIDGE Academy is aimed at increasing organizational capacity and developing a citywide environment that fosters innovation and creative and equitable problem-solving.

Pinellas County FL
Reference: Joe Lauro CPPB/CPPO, Director, Department of Administrative Services 315 Court Street, Clearwater, FL 33756
P: 727.464.4710 / E: [email protected]
Project Dates: January 2021 – May 2021
Contract Amount: $78,800 (Parks and Conservation Resources Department) Team Members: Ferguson (Project Director), Ingram (Project Manager), Kittelson (Staff Consultant), Parker (Staff Consultant), Olson (Staff Consultant), Pritchard (Staff Consultant)

Since 2014, Pinellas County (County) has hired the firm to conduct several operational assessments and to assist with improving efficiency and effectiveness. The firm has worked on several projects to conduct process and financial analyses on various departments and divisions.

In 2021, the County engaged the firm to complete an organizational assessment of the County’s Fleet Maintenance Division operations and practices. In 2020, Pinellas County Utilities (PCU) engaged Raftelis for a review of  PCU business processes, particularly as related to engineering, customer service, maintenance, and water quality.

In 2021, Pinellas County again engaged Raftelis to conduct a service level and staffing assessment of the Parks and Conservation Resources Department (PCRD). The goal of this assessment was to identify the current service level for park maintenance, customer service/enforcement, and operations; compare services with best practices guidelines; and define the staffing and resources required to meet service level goals. The project team applied a multi-faceted analytical process that included extensive employee engagement, 1011
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best practices research, and workload and labor hour profile analysis. The project team completed management and staff interviews, focus groups, and site visits. A wide variety of data was analyzed to define, for each park and each park asset, the labor hours required to complete ongoing and recurring tasks and special projects. This was compared to the labor hours required to achieve existing service levels and account for employee leave and vacancies. Service levels were then compared against best practices guidelines from industry organizations, such as the National Recreation and Park Association (NRPA), and benchmark organizations that operate in a similar climate, provide comparable services, and strive for best practices service levels in the area of park maintenance, customer service, and enforcement. The focus of this best practices research was to utilize service level goals, rather than population size or form of government, as the most important comparative factor. This approach enabled the project team to clearly define the staffing levels required to meet best practices service levels and to clarify the most effective approach for the staffing gap.

City of Austin TX
Reference: Kerri Lang, Budget Officer
301 W. 2nd Street, Room 3, Austin, TX 78701
P: 512.974.2610 / E: [email protected]
Project Dates: April 2020 – present
Contract Amount: $134,800 (2020 annual contract)
Team Members: Ferguson (Project Manager), Ingram (Staff Consultant), Olson (Staff Consultant), Pritchard (Staff Consultant), Kittelson (Staff Consultant), Flick (Staff Consultant)

In April 2020, the City of Austin (City) engaged Raftelis in a multi-year contract to conduct a series of continuous improvement studies in consultation with the City’s Office of Performance Management (OPM). The purpose of these studies was to identify specific strategies to improve the efficiency of municipal government operations and the value of government services delivered to the community. The City of Austin is the 11th largest city in the nation, characterized by an active community, vibrant entertainment and culture, stunning outdoor settings, and dynamic civic and social life. Committed to the mission of delivering the highest quality services in the most cost-effective manner, the City created the OPM in late 2015 to lead the City’s continuous improvement work and seeks to enhance the community-government trust equation through a three-part integrated approach to performance excellence: 1) driving continuous improvement of overall organizational effectiveness and capabilities, 2) continuously striving to accomplish strategic goals, and 3) promoting and supporting organizational and personal learning.

For the first contract, our project team and OPM developed a formal project work plan that identified the scope and key objectives for a review of six City departments:
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• Mobility Services
• Communications & Technology Management
• Building Services
• Human Resources
• Financial Services
• Communications & Public

For each of these departments, our project team was tasked with reviewing the value streams within the department, including service to customer departments, recommending enhancements to improve operations and cost-effectiveness, and assisting with implementation.

Subsequently, the firm conducted a series of additional projects, including:
• Development of Service Level Agreements between Building Services Department and customer departments
• Assessment of Financial Services Department IT operations to evaluate efficiency and service levels
• Creation of a Communication and Technology Management departmental strategic plan

City of Cedar Rapids IA
Reference: Chief Greg Smith, Fire Department
101 First Street SE, Cedar Rapids, IA 52401
P: 319.431.3807 / E: [email protected]
Project Dates: September 2022 - Present
Contract Amount: $75,500
Team Members: Ingram (Project Manager), DeMint (Subject Matter Expert), Flick (Staff Consultant)

The firm was engaged by the City of Cedar Rapids (City) to conduct a deployment analysis and operational review of the Cedar Rapids Fire Department (Department). The goal of this engagement is to identify opportunities for improved efficiency and effectiveness of operations, staffing, structure, technology, processes, and policies, as well as a review of staffing and deployment models, including the physical location of the City’s fire stations.

The comprehensive scope of work included assessing current Department operations, visiting each of the City’s nine fire stations, interviewing staff in each, meeting with dispatch staff, and reviewing GIS mapping and response data. Raftelis reviewed the age, condition, and maintenance of all facilities and equipment. Raftelis is working now to finalize the draft report, including recommendations on staff deployment and organizational and operational improvement.
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Brunswick County Public Utilities NC
Reference: John Nichols, Director, Brunswick County Public Utilities 250 Grey Water Road NE, Supply, NC 28462
P: 910.253.2653 / E: [email protected] Project Dates: March 2022 – March 2023
Contract Amount: $66,500
Team Members: Ferguson (Project Manager), Kirsch (Staff Consultant), Kittelson (Staff Consultant)

The Brunswick County Public Utilities Department (Department) engaged Raftelis to assess the organizational structure, services provided, and staffing needs of the water and wastewater utilities. This work included evaluating organizational and operational processes and comparing Brunswick County to peer organizations. Raftelis interviewed staff within the Department, toured facilities, reviewed best practices, and collected data from six benchmark organizations. Recommendations were made to improve the effectiveness of the utilities through structure changes, additional capacity, as well as enhancements to performance management, work planning, and communication within the Department.

Guilford County NC
Reference: Jason Jones, Deputy County Manager
301 West Market Street, Greensboro, NC 27401
P: 336.641.3383 / E: [email protected]
Project Dates: November 2021 – June 2022
Contract Amount: $64,500
Team Members: Ferguson (Project Manager), Teal (Staff Consultant)

In late 2021, Guilford County engaged Raftelis for an organizational assessment of its Human Resources Department (Department). The purpose of this assessment was to conduct an evaluation to improve the effectiveness of operations, staffing, technology, processes, and policies to support the HR Department’s transition to be proactive and innovative and to meet current and future workforce demands. Our team interviewed Department staff, met with stakeholders and internal customers, reviewed a variety of data and information, researched industry best practices, and compared the County’s HR operations with those in Durham, Forsyth, Mecklenburg, Orange, and Wake counties.

Recommendations included staffing and structural changes, training and development improvements, and technology implementation.

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F. COST INFORMATION
Cost Information
The total fixed fee for completion of the scope of work is $199,500. This includes all professional fees and expenses. Of this amount, $164,255 is for professional consulting services, and $35,245 is for expenses, including travel, lodging, and other incidentals.

The table below shows estimated project hours by team member classification, resulting in total professional consulting costs. No subconsultants will be used for this work.

Team Member Classification Activity
1 Activity
2 Activity
3 Activity
4 Activity
5 Total
Executive Vice President 2 2 2 2 2 10
Principal/Subject Matter Expert 4 40 14 4 4 66
Senior Manager 18 106 26 36 26 212
Senior Consultant 14 132 76 32 24 278
Consultant 4 64 24 16 12 120
Total Consulting Hours 42 344 142 90 68 686
Consulting Cost Per Activity
(Hours x Rate) $10,860 $84,090 $33,740 $22,380 $16,950 $168,020 Expenses $2,402 $18,394 $474 $5,986 $4,224 $31,480 TOTAL COST $13,262 $102,484 $34,214 $28,366 $21,174 $199,500

The table below shows hourly rates by project member classification. These rates will be fixed for work beyond the one-year contract.

Classification Hourly Rate
Executive Vice President $350
Principal/ Subject Matter Expert $275
Senior Manager $285
Senior Consultant $225
Consultant $195

The City will be invoiced monthly as tasks are completed.

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G. VALUE ADDED SERVICES
Value Added Services
Raftelis will apply a project approach, focusing on these specific objectives using our “Six R” approach. This involves soliciting and collecting information on City Responsibilities, Resources, Requirements, and Results in order to identify possible organizational and operational Revisions with an associated Roadmap to implement positive change. This approach is depicted in the following graphic.

Responsibilities – What drives the need for your services? It might be the organization’s vision or mission, Federal, State, or local ordinance, or community service standards or expectations. We review these drivers to better understand service level constraints and opportunities for change.

Resources – What assets are available to achieve your responsibilities? These may include time, human resources, staffing, management capacity, financial position, contractual services, technology, and equipment and facilities. We assess the adequacy of these resources based on the service level expectations.

Requirements – What direction is provided to staff? The method by which staff approach service delivery is often guided by laws, codes, policies and procedures, or informal mechanisms like past practices or on-the-job training. These sources provided staff with 1016
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direction on how they approach tasks and complete their work. We review these business processes to determine opportunities for improvement.

Results – What are the outcomes of your services? Our approach connects your responsibilities, resources, and requirements with the outcomes expected of your services.

We assess measures of efficiency and effectiveness to assist in data-driven decision-making.

Recommendations – Are there opportunities for improvement? Based on our qualitative and quantitative analysis of your programs and services, we develop recommendations for improving organizational performance. These changes can range from high-level considerations (i.e., should we be in this business) to strategic issues (i.e., should we consider alternative service sources) to tactical issues (i.e., how can we improve the productivity, efficiency, and effectiveness of the activity or service).

Roadmap – How do we get there? We develop a plan that will guide the organization through the implementation of the recommendations for improvement. The Roadmap offers the recommended priority order of implementation, suggestions for phasing, and key milestones for success. The Roadmap also serves as a valuable tool for the organization as well as the community to promote accountability and communicate progress toward implementation.

H. RESPONDENT ASSIGNMENT OF SUB-CONTRACT
Respondent Assignment
of Sub-Contract
Raftelis acknowledges that the resulting contract shall not be assigned, transferred, or sublet, in whole or in part, without the prior written approval of the City of Richmond. If Raftelis intends to subcontract any portion of the resulting contract, we must describe our process for selecting such subcontractor(s) and the quality control measures that Raftelis will employ to ensure that any subcontractor complies with the provisions of Respondent’s contract with the City.

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I. PREVIOUS CONTRACTS WITH THE CITY OF RICHMOND
Previous Contracts with the
City of Richmond
Raftelis has not been contracted to do business with the City of Richmond in the last 3 years.

J. EXCEPTIONS TO THIS REQUEST FOR PROPOSALS
Exceptions to this
Request for Proposals
We request that the City consider making the following modifications, shown in red below, to the Standard Contract. Please contact us if you have any questions or concerns about these modifications.

EXHIBIT D GENERAL CONDITIONS

3. City Property. . . Notwithstanding the foregoing, Contractor shall not be obligated to provide to City proprietary software or data which Contractor has developed or had developed for Contractor's own use; provided, however, that Contractor shall, pursuant to Section 15 below, indemnify, defend and hold harmless City from and against any discovery or Public Records Act request seeking the disclosure of such proprietary software or data. Nothing contained herein shall be deemed a transfer, assignment or divestiture by Consultant of its trade secrets, know-how or intellectual property.

Explanation: To make clear that we are not selling our trade secrets or intellectual property.

4. Patents, Trademarks, Copyrights and Rights in Data. Strike All.

Explanation: This Section is inapplicable to our work. It is more applicable to an engineering or construction contract. We cannot assign our trade secrets and intellectual property.

Correspondingly, the City has no need for it unless it intends to enter the business of municipal management consulting.

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10. Professional Ability. Contractor acknowledges, represents and warrants that Contractor and its employees are skilled and able to competently provide the services hereunder, and possess all professional licenses, certifications, and approvals necessary to engage in their occupations.

City has relied upon the professional ability and training of Contractor as a material inducement to enter into this Contract. Contractor shall perform in accordance with generally accepted professional practices and standards of Contractor's profession prevailing at the time and place the services are performed. In the event that City, in its sole discretion, desires the removal of any person employed or retained by Contractor to perform services hereunder, such person shall be removed immediately upon receiving notice from City.

Explanation: This change makes the statement of our professional standard of performance legally correct.

13. Termination in the Event of Default. Should Contractor fail to perform any of its obligations hereunder, within the time and in the manner provided or otherwise violate any of the terms of this Contract, City may, after written notice and a reasonable opportunity to cure such failure or violation, immediately terminate this Contract by giving written notice of such termination, stating the reasons for such termination.

Contractor shall be compensated as provided in Section 12 of these General Conditions; provided, however, there shall be deducted from such amount the amount of damage, including attorney's fees, expert witness fees and costs, if any, sustained by City by virtue of Contractor's breach of this Contract. Additionally, in the event of such termination, the City may proceed with the work in any reasonable manner it chooses.

Explanation: We should have notice of our failure or violation and a reasonable opportunity to cure such failure or violation.

15. Indemnification. To the fullest extent permitted by law, Contractor shall indemnify, defend and hold harmless City and its officers, employees, elected and appointed officials, and volunteers (the "Indemnified Parties") from and against any and all claims, demands, causes of action, lawsuits (whether at law, equity or both), proceedings, liabilities, losses, damages, expenses, costs (including without limitation attorney's fees and costs and expert witness fees), judgments, penalties, and liens of every nature resulting from injury to or death sustained by any person (including Contractor's employees), or damage to property of any kind, or any other injury or damage whatsoever, which injury, death or damage arises out of or is in any way connected with caused by the negligence, gross negligence or willful misconduct by Contractor in Contractor's performance of work hereunder or its failure to comply with any of its obligations contained in this Contract, after written notice and a reasonable opportunity to cure, or its failure to comply with violation of any current or prospective applicable law, regardless of Contractor's fault or negligence, including any of the same 1019
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resulting from the alleged or actual negligent act or omission of an Indemnified Party, except that said indemnity shall not be applicable to injury, death or damage to property arising from the sole or active negligence or willful misconduct of City, their officers, agents, or servants.

Explanation: The changes make the indemnity insurable by our carrier.

19. Compliance with Law s. Contractor shall comply with all applicable federal, state and local laws, statutes, ordinances, rules and regulations, and the orders and decrees of any courts or administrative bodies or tribunals, with respect to this Contract, including without limitation environmental laws, employment discrimination laws and prevailing wage laws.

Explanation: The compliance requirement should be of applicable statutes, etc.

28. Confidentiality.

Except as required by court order, subpoena, legal process or applicable law, Aall applications and records concerning any individual made or kept by Contractor or any public officer or agency in connection with the administration of or relating to services provided under this Contract will be confidential, and will not be open to examination for any purposes not directly connected with the administration of such service.

Explanation: Court order, subpoena, legal process is an obligatory exception to a confidentiality provision.

K. STATEMENT OF IMPARTIALITY AND DISCLOSURE
Statement of Impartiality
and Disclosure
Raftelis is not currently, and will not, during the performance of these services, participate in any other similar work involving a third-party with interests currently in conflict or likely to be in conflict with City of Richmond’s interests.

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APPENDIX A: RESUMES
Michelle Ferguson

PROJECT DIRECTOR
Vice President

ROLE
Michelle will be responsible for overall
project accountability and will be available
to provide quality assurance and control,
industry perspective, and insights into the
project.

PROFILE
Michelle has nearly 25 years of
management experience with and for local
governments across the country. As
organizational assessment practice leader
for The Novak Consulting Group, Michelle
spearheaded the work of nearly 200 local
government reviews in some of the
foremost governments across the country.

Michelle has completed detailed
organizational reviews of entire
jurisdictions and recommended
improvements to the structure, staffing, and
processes within departments of all sizes.

As a Lean certified professional, Michelle
excels at helping local governments
continuously improve and rely on data to
make informed choices about services to
the public. She is skilled in project
management, process improvement
strategies, performance measurement,
consent building, and public process
design. Additionally, she has provided
customized training in the development
and use of performance measures to assist
numerous organizations continuously
improve service delivery. Michelle is also a
Specialties
• Organizational assessment
• Staffing analysis
• Process improvement
• Performance management
• Capital planning
• Strategic planning
• Facilitation
• Community engagement
Professional History
• Raftelis: Vice President (2021-
present), Senior Manager (2020-
2021); Organizational Assessment
Practice Leader, The Novak
Consulting Group (2009-2020)
• Management Partners: Senior
Management Advisor (2005-2009)
• Arlington County, Virginia: Assistant
County Manager (2002-2005)
• City of Overland Park, Kansas:

Assistant City Manager (1996-2002)
Education
• Master of Public Administration -
University of Kansas (1998)
• Bachelor of Arts in Political Science -
Loyola University, Chicago (1996)
Certifications
• Lean Certified
Professional Memberships
• International City/County
Management Association (ICMA)
• Engaging Local Government
Leaders (ELGL)
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RAFTELIS 18

skilled facilitator, able to bring diverse groups of people together to articulate shared visions and priorities. She has led strategic planning engagements at the community, organizational, and department levels, and she has facilitated numerous staff and governing body retreats.

Michelle began her consulting career in 2005 following ten years of direct experience in local government management, which included serving as assistant county manager in Arlington County, Virginia. During her tenure with Arlington County, Michelle oversaw the daily management and implementation of the County's capital program. She also led the organization-wide performance measurement initiative establishing their Balanced Scorecard. Before Arlington County, Michelle served as assistant city manager in Overland Park, Kansas.

Michelle earned a bachelor's degree in political science from Loyola University-Chicago and a master's degree in public administration from the University of Kansas.

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RAFTELIS 19

Rebekka G. Hosken

PROJECT MANAGER
Senior Manager

ROLE
Rebekka will serve as the City’s main point
of contact for the project and will manage
the day-to-day aspects of the project
ensuring it is within budget, on schedule,
and effectively meets the City’s objectives.

She will also lead the consulting staff in
conducting analyses and preparing
deliverables for the project.

PROFILE
Rebekka joined Raftelis in 2020 with 16
years of direct service to local governments
and 10 years of management consulting
experience. As an experienced consultant,
Rebekka has led organizational assessments
for a broad range of operating departments
and offices in cities, counties, universities,
and special districts, including community
development, public works, police,
administration, and city attorney
departments. With direct operational
experience in municipal administration,
public works, and finance departments,
Rebekka’s breadth of knowledge makes her
skillful in quickly identifying organizational
strengths and opportunities, analyzing
operations through creation of process maps
and workflows, preparing actionable
recommendations for improvement, and
communicating findings to a wide variety of
audiences. She has consulted for over 125
clients throughout the United States and
Canada.

Rebekka served as finance director for the
City of La Cañada Flintridge, California, a
Professional History
• Raftelis: Senior Manager (2023-
present); Manager (2020-2022)
• City of La Cañada Flintridge,
California; Finance Director (2017-
2020)
• City of Simi Valley, California;
Budget Officer (2012-2017)
• City of Burbank, California; Senior
Management Analyst (2010-2012)
• Management Partners; Senior
Consultant (1999-2010)
• Village of La Grange Park, Illinois;
Assistant Village Manager (1996-
1999)
• City of Appleton, Wisconsin;
Assistant to the Mayor (1994-1996)
• Town of Lexington, Massachusetts;
Management Intern (1992-1993)
Education
• Master of Business Administration –
Boston University (1993)
• Certificate in Local Government and
Non-Profit Management – Boston
University (1993)
• Bachelor of Arts in Russian Studies
– University of Michigan (1989)
Professional Memberships
• Government Finance Officers
Association
• California Society of Municipal
Finance Officers
1023
RAFTELIS 20

contract city north of Los Angeles, responsible for accounts payable, receivable, budget, audit, and payroll. She automated several previously manual operations and identified and successfully obtained a State loan for the financing of the City’s new city hall. Previously, Rebekka was the budget officer for the City of Simi Valley, California, a full-service community in the Los Angeles region. She prepared the City’s $196 million annual budget and $160 million capital improvement program.

Rebekka earned a master’s degree in Business Administration with a Certificate in Local Government and Non-Profit Management from Boston University, and a Bachelor of Arts from the University of Michigan – Ann Arbor. She has published articles in Public Management magazine and served as a trainer in sessions at International City/County Management Association (ICMA) conferences.

SPECIALTIES
• Organizational assessment
• Budgeting and financial analysis
• Business process improvement
• Strategic planning
• Staffing analysis

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RAFTELIS 21

Cassandra Deck-
Brown

PUBLIC SAFETY SUBJECT

MATTER EXPERT
Principal Consultant – Policing and Law
Enforcement

ROLE
Cassandra will provide input and guidance as
a Subject Matter Expert for the policing and
public safety components of this project.

PROFILE
Cassandra Deck-Brown led the Raleigh,
North Carolina Police Department (RPD) as
the Chief of Police. After 34 years of service
navigating her way through the RPD ranks,
Cassandra was often the first woman or the
first African American to assume a role or
obtain a rank. During her career, Cassandra
implemented and oversaw high-profile
initiatives and best practices including
nationally recognized programs that
embodied community engagement and law
enforcement best practices. As a consultant,
she helps to focus agencies nationwide on
reimagining policing in the 21st century.

Leading the RPD during a pandemic and
period of civil unrest, she directed numerous
projects that were wellness-based, or which
assessed police operations during civil unrest.

In 2018, she launched a multi-year research
project with a major academic institution to
assess the organizational wellness of
personnel via the use of virtual reality and
scenario-based platforms. Cassandra also led
an 18-month community engagement effort
and testing initiative for the implementation
of a $4.7M body worn camera project. She
Professional History
• Principal Consultant - Raftelis (2021-
Present)
• Police Chief – City of Raleigh, NC
(2013-2021)
• Raleigh Police Officer - Various
Ranks (1987-2021)
• Grants Manager – City of Raleigh
Police Department (2002-2003)
Education
• Master of Public Administration –
North Carolina State University
(1995)
• Bachelor of Science in Criminal
Justice – East Carolina University
(1987)
Certifications
• Certified Instructor – NCDOJ
• (1995-Present)
• Leadership in Homeland Security –
Harvard (2018)
Professional Memberships
• International Association of Police
Chiefs (IACP)
• Major Cities Chiefs Association
(MCCA)
• Police Executive Research Forum
(PERF)
• National Organization of Black Law
Enforcement Executives (NOBLE)
• National Executive Institute (FBI-NEI)
• Georgia-Israel Law Enforcement
Exchange – Georgia State University
(GILLEE)
• Anti-Defamation League (ADL)
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RAFTELIS 22

travelled to Israel in 2017 as a member of a law enforcement delegation to promote community policing in a predominately military state.

In 2016, she partnered with an international research company to evaluate the racial disproportionality of traffic stops. She also had an active role in helping to create and develop the current City of Raleigh Strategic Plan. She established a Citizen’s Police Academy and youth summit as well to reduce barriers between police and the community.

With strategic planning on a department level and municipal level, she has effectively forecasted budget needs premised on crime data, predictive policing models, and Intelligence-Led Policing. Her leadership was instrumental in model policy formation for body worn cameras, understanding the LGBT community, unmanned aerial systems and community policing, and designing a state of the art 60,000 square foot training facility and police museum. With executive oversight, she directed an organizational health and wellness program and developed services for the greater community specific to homelessness and mental health.

Cassandra is a nationally-known speaker regarding public safety and has made many presentations including “Recruiting and Retaining Female Leaders” at the Axon Accelerate Conference; “Grace, Grit and Resolve,” at the IIR and Valor Webinar; “Leading in a Crisis,” for the United Nations Council of Women; “Four US Police Chiefs on the Need for Change,” on CBS This Morning with Gayle King; “Leveling the Playing Field,” at the NOBLE Conference; “Community Engagement,” at the 2018 IACP Conference, “Breaking the Glass Ceiling,” for the NBC-Megyn Kelly Today” Show, and “Addressing the Homeless and Mental Health,” with Victor Blackwell for CNN.

SPECIALTIES
• Policing and public safety
• Law enforcement policy formation
• Community engagement
• Personnel management
• Crisis Management

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RAFTELIS 23

Tom DeMint

FIRE AND EMERGENCY SERVICES

SUBJECT MATTER EXPERT
Principal Consultant – Fire and
Emergency Medical Services

ROLE
As Fire and Emergency Services Subject
Matter Expert, Tom will work at Rebekka’s
direction to provide input and technical
guidance for the project.

PROFILE
Tom DeMint was the fire chief of the Poudre
Fire Authority (PFA) in Fort Collins,
Colorado from June 2011 to June 2021. He is
respected as an effective leader that is driven,
versatile and enthusiastic. As a highly
experienced trainer, teacher and mentor,
focused on continued growth and
improvement, Tom saw the PFA receive
accreditation from the Commission of Fire
Accreditation International (CFAI) twice,
reduced the community’s ISO rating,
developed two strategic plans, implemented
collective bargaining, opened new stations and
innovated new services, and led the initial
responses to COVID-19 pandemic. Tom has
broad experience with emergency management
as he led the PFA through the two largest
wildfires in Colorado history (the High Park
and Cameron Peak Fires) as well as the
devastating floods of 2013.Aware of current
local social, economic, and political priorities,
Tom has been a reliable, efficient, resourceful,
innovative, proactive, and responsive leader.

He reported directly to the Poudre Fire
Authority Board of Directors, the Fort Collins
City Council, and the Poudre Valley Fire
Protection District Board of Directors. Tom is
Education
• Bachelor’s Degree in Public
Administration – Regis University
• Associates of Applied Sciences,
Paramedic – Pratt Community
College
• National Fire Academy Executive
Fire Officer – United States Fire
Administration
• Center for Public Safety Chief
Fire Officer Designation
Professional History
• Consultant – Raftelis (2022 to
Present)
• Consultant – Emergency
Services Consultants
International, Chantilly, VA (2021-
2022)
• Fire Chief – Poudre Fire Authority
(2011-2021)
• Shift Battalion Chief – Poudre
Fire Authority (2005-2011)
• Training Chief – Poudre Fire
Authority (2003-2005)
• Strategic Plan Coordinator –
Poudre Fire Authority (2002-
2003)
• Assistant Fire Marshall – Poudre
Fire Authority (1998-2002)
• Captain – Poudre Fire Authority
(1997-1998)
• Firefighter – Poudre Fire
Authority (1998-1998)
• EMT/Paramedic – Stormont Vail,
Topeka, LS & Poudre Valley
Hospital (1977-1988)
1027
RAFTELIS 24

Past President of the Colorado State Fire Chiefs (CSFC).

For five years, Tom served as the President of the Board of Directors for the Front Range Fire Consortium Authority, overseeing fire recruit and incumbent training for fire departments throughout Northern Colorado, Wyoming, and Montana. Tom is the former Co-Chair of the Fort Collins 9-11 Memorial fund raising committee and member of the Fort Collins Fire Museum Committee. He has conducted classes on fire prevention and fire code instruction in the United States, the Middle East, and the Caribbean.

Tom is a member of the International Association of Fire Chiefs (IAFC), National Fire Protection Association (NFPA), Metro Fire Planners, and in the past has been active in the Fire Marshals Association of Colorado, the International Code Council, and Partnership for Aging Friendly Communities. He is recognized as a Credentialed Chief Fire Officer by the Commission on Professional Credentialing and is a Level 1 Peer Assessor for the CFAI.

SPECIALTIES
• Fire Department and Emergency Medical Services assessment • Consolidation/shared services evaluation
• Staffing studies
• Fire service funding and budgeting
• Fire service response and deployment

PROFESSIONAL MEMBERSHIPS
• International Association of Fire Chiefs (Missouri Valley Division) • National Fire Protection Association
• Metro Fire Planners
• Fire Marshals Association of Colorado
• Commission on Professional Credentialing – Level 1 Peer Assessor • Colorado State Fire Chiefs

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RAFTELIS 25

Mark Olson

STAFF CONSULTANT - LEAD
Senior Manager

ROLE
Mark will work at the direction of Rebekka
in conducting interviews, directing analysis,
preparing recommendations, and drafting
deliverables. He will assist Rebekka in
leading the consulting team.

PROFILE
Mark brings 30 years of consulting and local
government service to the team. As a
consultant, Mark’s work includes financial
and management audits, organization and
management consulting, productivity and
benchmarking studies, and cost analysis and
process improvement projects for state and
local governments.

His clients have ranged from large state
agencies to small, independent local
governments across the nation. Areas of
work include financial and operational
reviews in a wide variety of service areas.

He employs a collaborative approach with
clients in developing information, assessing
alternatives, and producing solutions. Mark
also uses a variety of tested study
approaches that are customized to meet the
particular objectives of the project or client.

Whether the project takes the form of a
comprehensive government review or a
single agency review to meet a variety of
project purposes, Mark has led or
participated in these reviews in virtually
every area of government service provision
at the local level. In addition to
comprehensive government reviews, Mark has led multiple-agency reviews to identify Professional History
• Raftelis: Senior Manager (2021-
present); Manager (2020)
• DuPage County, Illinois Health
Department: Chief Financial
Officer/Director of Business
Resources (2014-2020)
• Financial, Operations and
Management Consulting (1997-
2014)
• Forest Preserve District of DuPage
County: Budget and Management
Coordinator (1994-1997)
• Illinois Department of
Transportation: Budget Development
Coordinator (1991-1994)
• Illinois Office of Management and
Budget: Capital Program Analyst
(1988-1991)
Education
• Master of Arts in Public Policy -
University of Chicago (1998)
• Bachelor of Arts in Sociology -
University of Illinois at Urbana-
Champaign (1985)
• Bachelor of Arts in Political Science -
University of Illinois at Urbana-
Champaign (1985)
Professional Memberships
• Government Finance Officers
Association (GFOA)
• Institute of Management
Accountants
1029
RAFTELIS 26

opportunities for shared services or alternative service delivery. These projects have included emergency communications reviews, inter-jurisdictional service sharing, and consolidation.

Mark earned a master’s degree in public policy studies with an emphasis on financial and operations analyses from the Harris Graduate School of Public Policy Studies at the University of Chicago. Mark also holds a bachelor’s degree in political science and a bachelor’s degree in sociology from the University of Illinois at Urbana-Champaign.

SPECIALTIES
• Local government budgeting and financial management
• Strategic and tactical planning
• Organizational assessment
• Business process improvement
• Change management

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RAFTELIS 27

J. Scott Parker

STAFF CONSULTANT
Senior Manager

ROLE
Scott will work at the direction of
Rebekka in conducting interviews,
directing analysis, preparing
recommendations, and drafting
deliverables.

PROFILE
Scott has over 20 years of experience in
local government, utility management,
and private consulting. Prior to joining
Raftelis, he served as the Asset Manager
for KC Water in Kansas City, Missouri.

Before KC Water, he served as the
Assistant Director for Public Works in
both Olathe and Lenexa, Kansas, where
he led the finance, data management,
solid waste, field operations (streets,
utilities, traffic), and communications
divisions, and managed multiple Police,
Parks, and Fire Department capital
projects. He also has private consultant
experience providing capital planning,
financial analysis, data system, asset
management, and interim-executive
services to Ft. Smith, Arkansas; Jackson,
Mississippi; and Kansas City, Kansas, all
of whom had signed Federal Consent
Decrees with the Environmental
Protection Agency (EPA).

Scott’s wide range of experience has given him extensive leadership and technical expertise in the fields of asset management, information technology, general management, and operations in multiple domains. As an Asset Management practitioner, Scott has used his understanding of the field to design teams that combine the best theoretical concepts of asset management with the opportunities and cultural circumstances specific to the organizations for which he has worked. He has extensive experience with all elements of utility capital Professional History
• Raftelis: Senior Manager (2022)
• KC Water: Utility Officer – Asset
Manager (2018-2022)
• Burns and McDonnell: Engineering
Manager (2015-2018)
• City of Olathe, KS: Assistant Director
of Public Works (2011-2015)
• City of Lenexa, KS: Assistant
Director of Public Works/Assistant to
the City Manager (2006-2011)
• Budget and Finance Analyst, City of
Kansas City, Missouri (2003-2006)
• L.P. Cookingham Management
Fellow, City of Kansas City, Missouri
(2002)
Education
• Master of Public Administration –
University of Missouri (2004)
• Master of Arts, History – University
of Arkansas-Fayetteville (2000)
• Bachelor of Arts in History -
Graceland University (1997)
Professional Memberships
• Institute of Asset Management
• Water Environment Federation
• American Water Works Association
• Water Research Foundation
1031
RAFTELIS 28

planning, financing, and project delivery. He has spoken at several national conferences on asset management and utilities management.

Scott earned a Masters degree of Public Administration from the University of Missouri, Masters degree of Arts from University of Arkanasa-Fayetteville, and a Bachelors of Arts from Graceland University.

SPECIALTIES
• Asset Management for utilities and local governments
• Capital Planning, Budgeting, and Implementation
• Data Strategic Planning, Management and Governance
• Business Risk Exposure (BRE) and Decision Support System (DSS) methodologies for infrastructure
• Data Analytics and Business Intelligence standards
• Business Process Modeling
• Performance Management (measurement, dashboarding, etc.) • Organizational Design and Capacity Building
• Utility Governance

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RAFTELIS 29

Ben Kittelson

STAFF CONSULTANT
Senior Consultant

ROLE
Ben will work at the direction of
Rebekka in conducting interviews,
directing analysis, preparing
recommendations, and drafting
deliverables.

PROFILE
Ben began consulting in 2019 after
seven years of direct service to local
governments on the East and West
Coast. Most recently, Ben worked for
the Budget and Management Services
Department in the City of Durham,
North Carolina. He worked on the
annual budget and the community-wide
strategic plan. He completed revenue
projections for sales tax and water sales,
assisted with financial planning for
affordable housing, and led community
engagement efforts designed to inform
the City’s budget process. Ben also
started an innovation partnership
program with local technology startup
companies.

As a Senior Consultant, Ben has worked
on dozens of projects across the country
evaluating local government operations
and identifying actionable
recommendations. Ben has assessed a
wide variety of local government
operations including public safety,
public works, utilities, parks, human
resources, and development review. He
has analyzed staffing levels and
organizational structure, created process
Specialties
• Budgeting and financial analysis
• Organizational assessment
• Strategic planning
• Innovation
• Staffing analysis
Professional History
• Raftelis: Senior Consultant (2022-
present) Consultant (2020-2021);
Consultant, The Novak Consulting
Group: (2019-2020)
• City of Durham, North Carolina: Senior
Budget and Management Analyst
(2016-2019)
• Guilford County, North Carolina: Budget
and Management Analyst (2014-2016)
• City of Gresham, Oregon: Intern (2014)
• Oregon Metro: Intern (2014)
• City of West Linn, Oregon: Intern (2013-
2014)
• City of Beaverton, Oregon: Intern (2012-
2013)
Education
• Master of Public Administration -
Portland State University (2014)
• Bachelor of Arts in Politics and
Economics - Willamette University
(2012)
Professional Memberships
• Engaging Local Government Leaders
(ELGL): Board of Directors (Chair)
• North Carolina Local Government
Budget Association (NCLGBA)
• Strong Towns
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RAFTELIS 30

maps, and developed recommendations based on the unique environment and infrastructure needs of the community. Ben is skilled at connecting operational and staffing needs with the strategic priorities of the organization, service levels, and community expectations. He has also assessed employee satisfaction and workplace culture using qualitative and quantitative methods.

Ben began his career in the Portland, Oregon region, where he served the Cities of Beaverton, West Linn, and Gresham, as well as Metro, the regional government for the Portland area. Ben expanded his experience in the Budget, Management, and Evaluation Department in Guilford County, North Carolina.

Ben is a founding member of Engaging Local Government Leaders (ELGL). Ben earned a master’s degree in public administration from Portland State University and a bachelor’s in politics and economics from Willamette University.

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RAFTELIS 31

Claire Pritchard

STAFF CONSULTANT
Senior Consultant

ROLE
Claire will work at the direction of Rebekka in
conducting interviews, directing analysis,
preparing recommendations, and drafting
deliverables.

PROFILE
Claire began her consulting career following
five years of service with Dakota County,
Minnesota, where most recently she held the
position of assistant to the county manager.

While with Dakota County, Claire coordinated
the County’s legislative agenda, assisted in the
development of the annual budget, and
conducted financial impact analyses and
process improvement efforts for a variety of
County functions. Claire also coordinated the
County’s transition to a new form of
government in 2013.

As a consultant, Claire has worked on
organizational and staffing analyses for
communities around the country. She has
developed staffing models for clients to predict
future staffing needs based upon a variety of
workload driver assumptions.

Claire has also assisted in developing financial
models to analyze revenue and expenditure
trends, as well as conducted detailed staffing
and workload analysis to determine optimal
organizational structures. She has developed
and analyzed an array of employee and
community-based surveys. Claire has
conducted several best practice and
benchmarking research projects and has
Specialties
• Organizational assessment
• Staffing analysis
• Survey and data analysis
• Best practice and benchmarking
research
Professional History
• Raftelis: Senior Consultant
(2023-present); Consultant
(2021-2022); Associate
Consultant (2020-2021);
Associate Consultant, The
Novak Consulting Group (2018-
2020)
• Dakota County, Minnesota:

Assistant to the County Manager
(2013-2017)
• National Association of Regional
Councils: Policy Intern (2012)
• Congressional Research Service
(2010-2011)
Education
• Master of Public Policy -
University of Chicago (2013)
• Bachelor of Arts in Political
Science - University of Chicago
(2009)
Professional Memberships
• International City/County
Management Association
(ICMA)
• Engaging Local Government
Leaders (ELGL)
• International Facility
Management Association (IMFA)
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RAFTELIS 32

assisted in the creation of strategic planning and implementation deliverables.

As a student at the University of Chicago, Claire served as a policy intern with the National Association of Regional Councils, where she developed an educational program on the work of regional councils. She was also the associate editor for international development for the Chicago Policy Review.

Claire earned a bachelor’s degree in political science from the University of Chicago and a master’s degree in public policy from the University of Chicago Harris School of Public Policy. She is a member of the International City/County Management Association and is a former ICMA Local Government Management Fellow.

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RAFTELIS 33

James Flick

STAFF CONSULTANT
Senior Consultant

ROLE
James will work at the direction of Rebekka in
conducting interviews, directing analysis,
preparing recommendations, and drafting
deliverables.

PROFILE
James has over 10 years of organizational
leadership experience, including five years in
local government. Most recently, James served
as the Director of Economic Development and
Public Information Officer for Deerfield
Township in Warren County, Ohio.

Previously, he was a Development Officer and
oversaw the Policy and Communication
Division for the Department of Community
and Economic Development at the City of
Cincinnati.

James' areas of expertise include economic
development, project management, and
performance measurement. In addition, he is a
skilled communicator, analyst, and creative
problem solver.

During his tenure at Deerfield Township,
James worked closely with entrepreneurs
looking to start a business, assisted existing
companies with relocations and expansions,
and managed development projects of varying
scales. He also served on the Executive Board
of the Warren County Small Business
Development Alliance.

At the City of Cincinnati, James was
instrumental in developing strategic plans to
Specialties
• Organizational assessment
• Strategic Planning
Professional History
• Raftelis: Senior Consultant
(2021-present)
• Northern Kentucky University:

Adjunct Instructor (2017-2021)
• Deerfield Township, Ohio:

Economic Development
Director/Public Information
Officer (2018-2021)
• City of Cincinnati: Development
Officer /Interim Division
Manager, Policy and
Communication (2016-2018)
• Cushman and Wakefield: Vice
President of Research and
Marketing (2010-2016)
Education
• Master of Public Administration –
Northern Kentucky University
(2010)
• Bachelor of Arts in Political
Science – Eastern Michigan
University (2006)
Professional Memberships
• Economic Development Finance
Professional Certification (NDC)
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RAFTELIS 34

address smart city initiatives, small business growth, retail revitalization in the urban core, and foreign direct investment.

James has presented at several state and regional conferences on smart cities, data and demographics, and economic development's relationship to parks. He is also an Adjunct Instructor for the Northern Kentucky University Master of Public Administration program, where he teaches Community Development, Public Policy, and Budgeting.

James earned a bachelor's degree in political science from Eastern Michigan University and a master's degree in public administration from Northern Kentucky University.

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RAFTELIS 35

Janae Janik

STAFF CONSULTANT
Consultant

ROLE
Janae will work at the direction of Rebekka in
conducting interviews, directing analysis,
preparing recommendations, and drafting
deliverables.

PROFILE
Janae began her consulting career following 12
years of service with the City of San Diego
Superior Court. Her expertise lies in the areas
of process improvement, strategic planning,
program implementation, and workforce
planning and support. She is an innovative
problem solver who maximizes the usage of
technological solutions.

As a Budget and Finance Analyst with the City
of San Diego, Janae assisted in the
development of a $200-million-dollar annual
budget, developed forecasting models for future
revenue and expenditures, and conducted
financial trend analysis of payroll and benefit
costs for over 1,200 employees.

Janae is well-versed in the creation of strategic
plans and managing high visibility projects with
cross-functional impacts. During her tenure as a
Court Operations Supervisor, she managed the
transition to virtual court proceedings during
the COVID-19 pandemic to allow remote
access to justice for community members.

Other notable projects included re-allocating
available resources to maintain services
following staffing reductions, authoring
standard operating procedures to share best
practices throughout the organization, and
developing a new electronic system for filing
Specialties
• Organizational assessment
• Process improvement
• Strategic planning
• Program implementation
• Performance management
• Forecasting
• Data analysis
Professional History
• Raftelis: Consultant (2022-
present)
• Wells Fargo: Senior Technology
Business Systems Consultant --
Contractor (2022)
• San Diego Superior Court:

Budget & Finance Analyst
(2021-2022); Court Operations
Supervisor (2018-2021);
Courtroom Clerk (2016-2018);
Court Administrative Clerk
(2013-2016); Court Operations
Clerk (2010-2013)
Education
• Master of Business
Administration – Western
Governors University (2015)
• Bachelor of Science in
Television, Film & New Media –
San Diego State University
(2010)
Professional Memberships
• Engaging Local Government
Leaders (ELGL)

1039
RAFTELIS 36

documents to reduce case processing times and improve customer experience. Janae was instrumental in identifying continuous process improvement opportunities that drove operational efficiencies and reduced costs.

Janae began her career at the Superior Court working in various customer service and administrative roles aimed at improving case processing times and providing quality service to members of the San Diego community.

Janae earned a master’s degree in business administration and strategic management from Western Governors University and a bachelor’s degree in television and film from San Diego State University.

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RAFTELIS 37

Colin Stifler

STAFF CONSULTANT
Consultant

ROLE
Colin will work at the direction of Rebekka in
conducting interviews, directing analysis,
preparing recommendations, and drafting
deliverables.

PROFILE
Colin brings diverse experiences in local
government and management consulting to his
projects and client relationships. He has
participated in numerous organizational
assessments and strategic planning initiatives
for municipalities, counties, and public utilities
across the United States. These engagements
have involved individual department
assessments and process improvement analyses,
as well as organization-wide reviews spanning
multiple departments.

Colin began his consulting career following six
years of education, non-profit, and local
government experience. Most recently, he
worked for Wake County, North Carolina’s
Community Services Department, where he
analyzed and helped implement policies
spanning five County divisions and over 700
employees. Notable projects included creating
an operational framework for an innovative
environmental education facility, as well as
identifying performance measures and
supporting metrics for the County’s library
book selectors.

Prior to Wake County, Colin worked with the
North Carolina Department of Environmental
Quality, where he specialized in local
Specialties
• Organizational assessment
• Survey and data analysis
• Best practice and benchmarking
research
• Program design and
implementation
• Contracting and oversight
Professional History
• Raftelis: Consultant (2021-
present);
• Wake County, North Carolina:

Assistant to the Community
Services Director (2021)
• North Carolina Dept. of
Environmental Quality: Research
Analyst (2020-2021)
• Fidelity Charitable: Senior
Specialist (2017-2019)
• Gannan Normal University
(China): Adjunct Professor
(2015-2016)
• South Korean Ministry of
Education: English Program
Coordinator (2014-2015)
Education
• Master of Public Administration -
University of North Carolina
(2021)
• Bachelor of Arts in Philosophy -
Miami University (2014)
Professional Memberships
• Engaging Local Government
Leaders (ELGL)
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RAFTELIS 38

government solid waste and recycling issues. After helping dozens of counties and municipalities navigate contract disputes, Colin created an ideal contract template for local governments to use when outsourcing the collection and processing of recyclable materials.

In his role with Fidelity Charitable, he coordinated multimillion dollar donations for prominent philanthropists. He began his career as an English teacher in South Korea and China.

Colin earned a bachelor’s degree in philosophy from Miami University (Ohio) and a master’s degree in public administration from the University of North Carolina at Chapel Hill.

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RAFTELIS 39

APPENDIX B: REQUIRED FORM

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For the Contract between the City of
Richmond and

EXHIBIT B

PAYMENT PROVISIONS

{PLEASE NOTE THAT THE CITY OF RICHMOND SHALL NOT PAY FOR SERVICES

THAT EXCEED THE CONTRACT PA YMENT LIMIT UNLESS A CONTRACT

AMENDMENT HAS BEEN APPROVED BY THE CITY COUNCIL OR THE CITY MANAGER}

1. Provided Contractor is not in default under this Contract, Contractor shall be compensated as provided below.

2. Any and all payments made pursuant to this Contract shall be subject to the Contract Payment Limit. The Payment Limit includes expenses (phones, photo copying, meals and travel etc). Invoices, shall be adequately detailed, based on accurate records, and be in a form reasonably satisfactory to the City. Contractor may be required to provide back-up material upon request.

3. Contractor shall submit timely invoices to the following address:

Attention: City of Richmond, Finance Department - Accounts Payable Project Manager: Department:

PO Box 4046
Richmond, CA 94804-0046

4. All invoices that are submitted by Contra ctor shall be subject to the approval of the City’s Project Manager, before payments shall be authorized.

5. The City will pay invoice(s) within 45 days a fter completion of services to the City’s satisfaction. The City shall not pay late fees or interest.

6. A Richmond business license shall be obtained before any payment under this Contract shall be authorized and the business license must be kept current during the term of this Contract for payments to continue to be authorized.

7. All insurance coverage required by this Contract shall be provided by the Contractor before this Contract shall be executed by the City. The insurance coverage must be kept current during the term of this Contract for payments to continue to be authorized. 1044
For the Contract between the City of
Richmond and

EXHIBIT C

AUTHORIZED REPRESENTATIVES AND NOTICES

1. Notices
. All notices, demands, statements, or communications provided for by this Contract shall be in writing and may be delivered by deposit in the United States mail, postage prepaid. Notices to the City shall be addressed to the Department Head and (as delineated below in section 1.1) to the project manager responsible for the administration of or the supervision of the scope of work under this Contract. Notices to the Contractor shall be addressed to the party designated by Contractor (as delineated below in section 1.2). Notice shall be deemed delivered (a) upon personal delivery; (b) as of the fifth business day after mailing by United States certified mail, postage prepaid, addressed to the proper party; or (c) as of 12:00 p.m. on the second business day immediately after the day it is deposited with and accepted by Federal Express, or a similar overnight courier service, addressed to the proper party and marked for next business day morning delivery. For the purposes of this Contract, a "business day" means any day Monday through Friday that is not a holiday recognized by the federal government or the State of California.

1. 1 CITY hereby designates as its Authorized Representative the Project Manager whose name and address are as follows:

City of Richmond

Richmond, CA 94804-0046

1. 2 CONTRACTOR hereby designates as its Authorized Representative the Project Manager whose name and address are as follows:

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General Conditions/EJ/TE 01-19-11 1 of 13

EXHIBIT D

GENERAL CONDITIONS

1. Independent Contractor . Contractor acknowledges, represents and warrants that Contractor is not a regular or temporary employee, joint venturer or partner of the City, but rather an independent Contractor. This Contract shall not be construed to create an agency, servant, employee, partnership, or joint venture relationship. As an independent Contractor, Contractor shall have no authority to bind City to any obligation or to act as City's agent except as expressly provided herein. Due to the independent Contractor relationship created by this Contract, City shall not withhold state or federal income taxes, the reporting of which shall be Contractor's sole responsibility.

2. Brokers . Contractor acknowledges, represents and warrants that Contractor has not hired, retained or agreed to pay any entity or person any fee, commission, percentage, gift, or any other consideration, contingent upon or resulting from the award or making of this Contract.

3. City Property . The rights to applicable plans, drawings, reports, calculations, data, specifications, videos, graphics or other materials prepared for or obtained pursuant to this Contract, which, upon request, are to be delivered to City within a reasonable time, shall be deemed assigned to City. If applicable, Contractor shall prepare check prints upon request. Notwithstanding the foregoing, Contractor shall not be obligated to provide to City proprietary software or data which Contractor has developed or had developed for Contractor's own use; provided, however, that Contractor shall, pursuant to Section 15 below, indemnify, defend and hold harmless City from and against any discovery or Public Records Act request seeking the disclosure of such proprietary software or data.

4. Patents, Trademarks, C opyrights and Rights in Data
. Contractor shall not
publish or transfer any materials, discoveries, developments, concepts, designs, ideas, know how, improvements, inventions and/or original works of authorship resulting from activities supported by this Contract without the express prior written consent of the City Manager. If anything resulting from activities supported by this Contract is patentable, trademarkable, copyrightable or otherwise legally protectable, City reserves the exclusive right to seek such intellectual property rights. Notwithstanding the foregoing, Contractor may, after receiving City's prior written consent, seek patent, trademark, copyright or other intellectual property rights on anything resulting from activities supported by this Contract. However, City reserves, and Contractor irrevocably grants, a nonexclusive, fully paid-up, royalty-free, assumable, perpetual, worldwide license, with the right to transfer, sublicense, practice and exploit said license and the right to make, have made, copy, modify, make derivative works of, use, sell, 1046
General Conditions/EJ/TE 01-19-11 2 of 13

import, and otherwise distribute under all applicable intellectual properties without restriction of any kind said license.

Contractor further agrees to assist City, at City's expense, in every proper way to secure the City’s rights in any patents, trademarks, copyrights or other intellectual property rights relating thereto, including the disclosure to City of all pertinent information and data with respect thereto. Contractor shall also assist City in the execution of all applications, specifications, oaths, assignments, recordations, and all other instruments which City shall deem necessary in order to apply for, obtain, maintain and transfer such rights, or if not transferable, to waive such rights. Contractor shall further assist City in the execution of all applications, specifications, oaths, assignments, recordations and all other instruments which City shall deem necessary in order to assign and convey to City, and any assigns and nominees the sole and exclusive right, title and interest in and to any patents, trademarks, copyrights or other intellectual property rights relating thereto. Contractor further agrees that its obligation to execute or cause to be executed, when it is in Contractor's power to do so, any such instruments or papers shall continue during and at all times after the end of Contractor's services and until the expiration of the last such intellectual property right. Contractor hereby irrevocably designates and appoints City, and its duly authorized officers, agents and servants, as its agent and attorney-in-fact, to act for and in its behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the application for, prosecution, issuance, maintenance or transfer of letters of patents, copyright and other registrations. This power of attorney is coupled with an interest and shall not be affected by Contractor's subsequent incapacity.

5. Inspection
. Contractor's performance, place of business and records pertaining to this Contract are subject to monitoring, inspection, review and audit by authorized representatives of the CITY, the State of California, and the United States Government.

If the project or services set forth in Exhibit A shall be performed on City or other public property, City shall have the right to inspect such work without notice. If such project or services shall not be performed on City or other public property, City shall have the right to inspect such work upon reasonable notice.

6. Services
. The project or services set forth in Exhibit A shall be performed to the full satisfaction and approval of City. In the event that the project or services set forth in Exhibit A are also itemized by price, City, in its sole discretion, may, upon notice to Contractor, delete certain items or services set forth in Exhibit A, in which case there shall be a corresponding reduction in the amount of compensation paid to Contractor. 1047
General Conditions/EJ/TE 01-19-11 3 of 13

Contractor shall, at its own cost and expense, furnish all facilities and equipment necessary for Contractor to complete the project or perform the services required herein, unless otherwise provided in Exhibit A.

7. Records
. Contractor shall keep and make available for inspection and copying by authorized representatives of the City, the State of California, and the United States Government, the Contractor's regular business records and such additional records pertaining to this Contract as may be required by the City.

Contractor shall retain all documents pertaining to this Contract for a period of five (5) years after this C ontract's termination (or for any further period that is required by law) and until all Fede ral or State audits are complete and exceptions resolved for this contract's funding period. Upon request, CONTRACTOR shall make thes e records available to authorized representatives of the CITY, the State of California, and the United States Government.

Contractor shall keep full and detailed accounts, maintain records, and exercise such controls as may be necessary for proper financial management under this Contract. The Contractor’s accounting and control systems shall be satisfactory to City. Contractor's accounting systems shall conform to generally accepted accounting principles and all records shall provide a breakdown of total costs charged under this Contract, including properly executed payrolls, time records, utility bills, invoices and vouchers. The City shall be afforded prompt access to Contractor's records, books, and Contractor shall preserve such project records for a period of at least five (5 years after the termination of this Contract , or for such longer period as may be required by law.

Contractor shall permit City and its authorized representatives and accountants to inspect, examine and copy Contractor's books, records, accounts, correspondence, instructions, drawings, receipts, subcontracts, purchase orders, vouchers, memoranda and other data relating to the project or services set forth in Exhibit A, and any and all data relevant to this Contract at any reasonable time for the purpose of auditing and verifying statements, invoices, or bills submitted by Contractor pursuant to this Contract and shall provide such assistance as may be reasonably required in the course of such inspection. Contractor shall also allow City access to the record keeping and accounting personnel of Contractor.

City further reserves the right to examine and re-examine said books, records, accounts, and data during the five (5 year period following the termination of this Contract; and Contractor shall in no event dispose of, destroy, alter, or mutilate said books, records, accounts, and data in any manner whatever for five (5 years after the termination of this Contract. 1048
General Conditions/EJ/TE 01-19-11 4 of 13

Pursuant to California Government Code § 10527, the parties to this Contract shall be subject to the examination and audit of representatives of the Auditor General of the State of California for a period of three (3) years after final payment under this Contract. The examination and audit shall be confined to those matters connected with the performance of this Contract including, but not limited to, the cost of administering this Contract.

8. Changes and Extra Work . All changes and/or extra work under this Contract shall be performed and paid for in accordance with the following:

Only the City Council or the City Manager may authorize extra and/or changed work. Contractor expressly recognizes that other City personnel are without authorization to either order extra and/or changed work or waive contract requirements. Failure of Contractor to secure the authorization for such extra and/or changed work shall constitute a waiver of any and all right to adjustment in contract price due to such unauthorized work and Contractor thereafter shall be entitled to no compensation whatsoever for performance of such extra and/or changed work.

If Contractor is of the opinion that any work which Contractor has been directed to perform is beyond the scope of this Contract and constitutes extra work, Contractor shall promptly notify City of the fact. The City shall make a determination as to whether or not such work is, in fact, beyond the scope of this Contract and constitutes extra work. In the event that City determines that such work does constitute extra work, City shall provide extra compensation to Contractor on a fair and equitable basis. A change order or Contract Amendment providing for such compensation for extra work shall be negotiated between City and Contractor and executed by Contractor and the appropriate City official.

In the event City determines that such work does not constitute extra work, Contractor shall not be paid extra compensation above that provided herein and if such determination is made by City staff, said determination may be appealed to the City Council; provided, however, a written appeal must be submitted to the City Manager within five (5) days after the staff's determination is sent to Contractor. Said written appeal shall include a description of each and every ground upon which Contractor challenges the staff's determination.

9. Additional Assistance
. If this Contract requires Contractor to prepare
plans and specifications, Contractor shall provide assistance as necessary to resolve any questions regarding such plans and specifications that may arise during the period of advertising for bids, and Contractor shall issue 1049
General Conditions/EJ/TE 01-19-11 5 of 13

any necessary addenda to the plans and specifications as requested. In the event Contractor is of the opinion that City's requests for addenda and assistance is outside the scope of normal services, the parties shall proceed in accordance with the changes and extra work provisions of Section 8 of these General Conditions.

City has relied upon the professional ability and training of Contractor as a material inducement to enter into this Contract. Contractor shall perform in accordance with generally accepted professional practices and standards of Contractor's profession. In the event that City, in its sole discretion, desires the removal of any person employed or retained by Contractor to perform services hereunder, such person shall be removed immediately upon receiving notice from City.

11. Business License
. Contractor shall obtain a Richmond Business License
before performing any services required under this Contract. The failure to so obtain such license shall be a material breach of this Contract and grounds for immediate termination by City; provided, however, that City may waive the business license requirement in writing under unusual or extraordinary circumstances without necessitating any modification of this Contract to reflect such waiver.

12. Termination Without Default. Notwithstanding any provision herein to the contrary, City may, in its sole and absolute discretion and without cause, terminate this Contract at any time prior to completion by Contractor of the project or services hereunder, immediately upon written notice to Contractor. Contractor may terminate this Contract at any time in its sole and absolute discretion and without cause upon 30 days' written notice to City. In the event of termination by either party, Contractor shall be compensated for: (1) all authorized work satisfactorily performed prior to the effective date of termination; (2) necessary materials or services of others ordered by Contractor for this Contract, prior to receipt of notice of termination, irrespective of whether such materials or services of others have actually been delivered, provided that Contractor is not able to cancel such orders. Compensation for Contractor in such event shall be determined by City in accordance with the percentage of the project or services completed by Contractor; and all of Contractor's finished or unfinished work product through the time of the City's last payment shall be transferred and assigned to City. Additionally, in the event of such termination, the City may proceed with the work in any reasonable manner it chooses.

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13. Termination in the Event of Default. Should Contractor fail to perform any of its obligations hereunder, within the time and in the manner provided or otherwise violate any of the terms of this Contract, City may immediately terminate this Contract by giving written notice of such termination, stating the reasons for such termination. Contractor shall be compensated as provided in Section 12 of these General Conditions; provided, however, there shall be deducted from such amount the amount of damage, including attorney's fees, expert witness fees and costs, if any, sustained by City by virtue of Contractor's breach of this Contract. Additionally, in the event of such termination, the City may proceed with the work in any reasonable manner it chooses.

14. Conflict of Interest. Contractor acknowledges, represents and warrants that Contractor shall avoid all conflicts of interest (as defined under any federal, state or local statute, rule or regulation, or at common law) with respect to this Contract. Contractor further acknowledges, represents and warrants that no City official or employee has any economic interest, as defined in Title 2, California Code of Regulations §§ 18703.1 through 18703.5, with Contractor that would invalidate this Contract. Contractor acknowledges that in the event that Contractor shall be found by any judicial or administrative body to have any conflict of interest (as defined above) with respect to this Contract, all consideration received under this Contract shall be forfeited and returned to City forthwith. This provision shall survive the termination of this Contract for one (1) year.

15. Indemnification.

(a) If this Contract is a contract for design professional services subject to California Civil Code Section 2782.8(a) and Contractor is a design professional, as defined in California Civil Code Section 2782.8(b)(2), Contractor shall hold harmless, defend and indemnify the City, its officers, agents, employees, and volunteers from and against any and all claims, damages, losses, and expenses including attorneys’ fees arising out of, or pertaining to, or relating to the negligence, recklessness, or willful misconduct of the Contractor, except where caused by the active negligence, sole negligence, or willful misconduct of the City. To the fullest extent permitted by law, Contractor shall immediately defend and indemnify the City and its officers, agents, employees, and volunteers from and against any and all liabilities, regardless of nature or type, that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Contractor, or its employees, agents, or subcontractors.

Liabilities subject to the duties to defend and indemnify include, without limitation, any and all claims, losses, damages, penalties, fines, and judgments; associated investigation and administrative expenses; defense costs, including but not limited to reasonable attorneys’ fees; court costs; and costs of alternative dispute resolution. Contractor’s obligation to 1051
General Conditions/EJ/TE 01-19-11 7 of 13

indemnify applies unless it is finally adjudicated that the liability was caused by the sole active negligence or sole willful misconduct of an indemnified party.
(b) If this Contract is not a contract for design professional services subject to California Civil Code Section 2782.8(a) or Contractor is not a design professional as defined in California Civil Code Section 2782.8(b)(2), Contractor shall indemnify, defend, and hold harmless the City, its officers, agents, employees and volunteers from any and all claims, suits, or actions of every name, kind and description, brought forth on account of injuries to or death of any person or damage to property arising from or connected with the willful misconduct, negligent acts, errors or omissions, ultra-hazardous activities, activities giving rise to strict liability, or defects in design by Contractor or any person directly or indirectly employed by, or acting as, the agent for Contractor in the performance of this Contract, including the concurrent or successive passive negligence of the City, its officers, agents, employees or volunteers.
(c) It is understood that the duty of Contractor to indemnify and hold harmless includes the duty to defend as set forth in Section 2778 of the California Civil Code. Contractor shall be obligated to defend, in all legal, equitable, administrative, or special proceedings, with counsel approved by the City, the City and its officers, agents, employees, and volunteers, immediately upon tender to Contractor of the claim in any form or at any stage of an action or proceeding, whether or not liability is established. An allegation or determination that persons other than Contractor are responsible for the claim does not relieve Contractor from its separate and distinct obligation to defend under this Section 15. The obligation to defend extends through final judgment, including exhaustion of any appeals. The defense obligation includes an obligation to provide independent counsel if Contractor asserts that liability is caused in whole, or in part, by the negligence or willful misconduct of an indemnified party. (d) The review, acceptance or approval of the Contractor’s work or work product by any indemnified party shall not affect, relieve or reduce the Contractor’s indemnification or defense obligations. This Section 15 survives completion of the services or the termination of this Contract.

The provisions of this Section 15 are not limited by, and do not affect, the provisions of this Contract relating to insurance.
(e) Acceptance of insurance certificates and endorsements required under this Contract does not relieve Contractor from liability under this Section

15. This Section 15 shall apply whether or not such insurance policies are determined to be applicable to any such damages or claims for damages.

16. Safety
. Contractor acknowledges that the City is committed to the highest standards of workplace safety. Contractor shall perform all work hereunder in full compliance with applicable local, state and federal safety requirements including but not limited to Occupational Safety and Health Administration requirements, and shall assume sole and complete 1052
General Conditions/EJ/TE 01-19-11 8 of 13

responsibility for the safety of Contractor's employees and any subContractor's employees. If a death, serious personal injury or substantial property damage occurs in connection with the performance of this Contract, Contractor shall immediately notify the City by telephone.

17. Insurance. Insurance requirements are set forth in Exhibit F to this Contract. Contractor shall abide by the insurance requirements set forth in said Exhibit F.

18. Non-Liability of Officials and Employees of the City. No official or employee of the City shall be personally liable for any default or liability under this Contract.

19. Compliance with Laws. Contractor shall comply with all federal, state and local laws, statutes, ordinances, rules and regulations, and the orders and decrees of any courts or administrative bodies or tribunals, with respect to this Contract, including without limitation environmental laws, employment discrimination laws and prevailing wage laws. Compliance under this provision includes compliance with all provisions of the Richmond Municipal Code ("Municipal Code"), including Chapters 2.50, 2.52, 2.56, and 2.60, if applicable.

Contractor acknowledges that under § 2.60.070 of the Municipal Code ("Living Wage Ordinance"), Contractor shall promptly provide to City documents and information verifying its compliance with the Living Wage Ordinance. Also as prescribed in § 2.60.070, Contractor shall notify each of its affected employees with regards to the wages that are required to be paid pursuant to the Living Wage Ordinance.

Contractor shall comply with § 2.28.030 of the Municipal Code, obligating every Contractor or subcontractor under a contract or subcontract with the City for public work or for goods or for services to refrain from discriminatory employment or subcontracting practices on the basis of race, color, sex, sexual orientation, religious creed, national origin or ancestry of any employee, any applicant for employment or any potential subcontractor.

Contractor acknowledges that the City’s Drug Free Workplace Policy, Violence in the Workplace Policy and the Policy Against Workplace Harassment, are available on the City’s website at
http://www.ci.richmond.ca.us/workplacepolicies
. Contractor agrees to
abide by the terms and conditions of said policies.

20. Limitations upon Subcontracting and Assignment. This Contract binds the heirs, successors, assigns and representatives of Contractor. The Contractor shall not enter into subcontracts for any work contemplated 1053
General Conditions/EJ/TE 01-19-11 9 of 13

under this Contract and shall not assign this Contract, nor any portion hereof or monies due or to become due, without the prior written consent of the City Council or its designee.

Contractor acknowledges that the services which Contractor shall provide under this Contract are unique, personal services which, except as otherwise provided herein, Contractor shall not assign or sublet to any other party without the prior written approval of City, which approval may be withheld in City's sole and absolute discretion. In the event that City, in writing, approves any assignment or subletting of this Contract or the retention of subcontractors by Contractor, Contractor shall provide to City upon request copies of each and every subcontract contract prior to the execution thereof by Contractor and subcontractor. Any assignment by Contractor of any or all of its rights under this Contract without first obtaining City's prior written consent shall be a default under this Contract.

The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Contractor (if applicable), or of the interest of any general partner or joint venturer or syndicate member if Contractor is a partnership or joint-venture or syndicate, which shall result in a change of control of Contractor, shall be deemed an assignment. For this purpose, control shall mean fifty percent or more of the voting power or twenty-five percent or more of the assets of the corporation, partnership or joint-venture.

21. Integration
. This Contract constitutes the entire agreement between the parties concerning the subject matter hereof and supersedes any previous oral or written agreement; provided, however, that correspondence or documents exchanged between Contractor and City may be used to assist in the interpretation of the Exhibits to this Contract.

22. Modifications and Amendments. This Contract may be modified or amended only by a change order or Contract Amendment executed by both parties and approved as to form by the City Attorney.

23. Conflicting Provisions. In the event of a conflict between these General Conditions and those of any Exhibit or attachment hereto, these General Conditions shall prevail; provided, however, that any Special Conditions as set forth in Exhibit E shall prevail over these General Conditions. In the event of a conflict between the terms and conditions of any two or more Exhibits or attachments hereto, those prepared by City shall prevail over those prepared by the Contractor, and the terms and conditions preferred by the City shall prevail over those preferred by the Contractor.

24. Non-exclusivity. Notwithstanding any provision herein to the contrary, the services provided by Contractor hereunder shall be non-exclusive, and 1054
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City reserves the right to employ other Contractors in connection with the project.

25. Exhibits. All Exhibits hereto are made a part hereof and incorporated herein by reference; provided, however, that any language in Exhibit A which does not pertain to the project description, proposal, scope of services, or method of compensation (as applicable) , or any corresponding responsibilities of City, shall be deemed extraneous to, and not a part of, this Contract.

26. Force Majeure. Neither party hereto shall be considered in default in the performance of its obligations hereunder to the extent that the performance of such an obligation is prevented or delayed by reason of acts of God, strikes, boycotts, lock-outs, inability to procure materials not related to the price thereof, failure of power, restrictive governmental laws and regulations enacted after the date of this Contract, riots, civil unrest, acts of terrorism, insurrection, war, declaration of a state or national emergency or other reasons of a like nature not within the reasonable control of such party.

27. Time of the Essence. Time is of the essence of this Contract. Contractor and City agree that any time period set forth in Exhibit A represents their best estimates with respect to completion dates and both Contractor and City acknowledge that departures from the schedule may occur.

Therefore, both Contractor and City will use reasonable efforts to notify one another of changes to the schedule. Contractor shall not be responsible for performance delays caused by others, or delays beyond Contractor's control, and such delays shall extend the times for performance of Contractor's work.

28. Confidentiality. Contractor agrees to comply with, and to require its employees, agents and partners to comply with, all applicable State or Federal statutes or regulations respecting confidentially, including but not limited to, the identity of persons served under this Contract, their records, or services provided them, and assures that:

All applications and records concerning any individual made or kept by Contractor or any public officer or agency in connection with the administration of or relating to services provided under this Contract will be confidential, and will not be open to examination for any purposes not directly connected with the administration of such service.

No person will publish or disclose or permit or cause to be published or disclosed, any list of persons receiving services, except as may be required in the administration of such service.

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29. Third Parties. Nothing herein shall be interpreted as creating any rights or benefits in any third parties. For purposes hereof, transferees or assignees as permitted under this Contract shall not be considered "third parties."

30. Governing Law. This Contract shall be construed in accordance with the law of the State of California without regard to principles of conflicts of law.

This Contract is made in Contra Costa County, California, and any action relating to this Contract shall be instituted and prosecuted in the courts of Contra Costa County, California.

31. Nonrenewal. Contractor understands and agrees that there is no representation, implication, or understanding that the services provided by Contractor under this Contract will be purchased or renewed by the City under a new contract following expiration or termination of this Contract, and waives all rights or claims to notice or hearing respecting any failure by City to continue the purchase of all or any failure to continue purchase of all or any such services from Contractor.

32. Claims. Any claim by Contractor against City hereunder shall be subject to Government Code §§ 800 et seq. The claims presentation provisions of said Act are hereby modified such that the presentation of all claims hereunder to the City shall be waived if not made within six months after accrual of the cause of action.

33. Interpretation. This Contract shall be interpreted as if drafted by both parties.

34. Warranty. In the event that any product shall be provided to the City as part of this Contract, Contractor warrants as follows: Contractor possesses good title to the product and the right to transfer the product to City; the product shall be delivered to the City free from any security interest or other lien; the product meets any specifications contained herein; the product shall be free from material defects in materials and workmanship under normal use for a period of one (1) year from the date of delivery; and the product shall be fit for its intended purpose(s). Notwithstanding the foregoing, consumable and maintenance items (such as light bulbs and batteries) shall be warranted for a period of one hundred and eighty (180) days from the date of delivery. All repairs during the warranty period shall be promptly performed by Contractor, at Contractor's expense, including shipping.

35. Severability. In the event that any of the provisions or portions or applications thereof of this Contract are held to be unenforceable or invalid by any court of competent jurisdiction, City and Contractor shall negotiate an equitable adjustment in the provisions of the Contract with a view 1056
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toward effecting the purpose of this Contract, and the validity and enforceability of the remaining provisions or portions or applications thereof, shall not be affected thereby.

36. Authority. City warrants and represents that the signatory hereto (the Mayor of the City of Richmond or the City Manager) is duly authorized to enter into and execute this Contract on behalf of City. The party signing on behalf of Contractor warrants and represents that he or she is duly authorized to enter into and execute this Contract on behalf of Contractor, and shall be personally liable to City if he or she is not duly authorized to enter into and execute this Contract on behalf of Contractor.

37. Waiver. The waiver by City of any breach of any term or provision of this Contract shall not be construed as a waiver of any subsequent breach.

Inspections or approvals, or statements by any officer, agent or employee of the City relating to the Contractor’s performance, or payments therefore, or any combination of these acts, shall not relieve the Contractor’s obligation to fulfill this Contract as prescribed; nor shall the City be thereby stopped from bringing any action for damages or enforcement arising from any failure to comply with any of the terms and conditions of this Contract.

38. Possessory Interest. If this Contract results in the Contractor having possession of, claim to or right to the possession of land or improvements, but does not vest ownership of the land or improvements in the same person, or if this Contract results in the placement of taxable improvements on tax exempt land (Revenue and Taxation Code 107), such interest or improvements may represent a possessory interest subject to property tax, and Contractor may be subject to the payment of property taxes levied on such interest.

39. Performance and Final Acceptance.

Contractor represents that it is experienced, qualified, registered, licensed, equipped, organized and financed to perform the services under this Contract.

Contractor shall perform the services under this Contract with that degree of skill and judgment normally exercised by professional firms performing services of a similar nature in the State of California, and shall be responsible for the professional quality, technical accuracy and coordination of the services it performs under this Contract. In addition to the other rights and remedies which City may have, Contractor shall, at its own expense, correct any services which fail to meet the above standard.

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General Conditions/EJ/TE 01-19-11 13 of 13

City shall provide Contractor an opportunity to cure errors and omission which may be disclosed during the review of submittals, with no increase in the authorized Contract Payment Limit. Should Contractor fail to make necessary corrections in a timely manner, such corrections shall be made by the City and the cost thereof shall be charged to Contractor.

If warranted, City shall determine, and Contractor may request such determination, that Contractor has satisfactorily completed performance of this Contract. Upon such determination, City shall issue to Contractor a written Notice of Final Acceptance, after which Contractor shall not incur further costs under this Contract. Contractor shall respond to such Notice of Final Acceptance by executing and submitting to City a Release and Certificate of Final Payment.

40. Survival
. The rights and obligations of the parties which by their nature survive termination or completion of the services covered by this Contract shall remain in full force and effect after termination or completion. 1058
For the Contract between the City of
Richmond and

EXHIBIT E

SPECIAL CONDITIONS

The General Conditions are hereby amended to include the following modifications and/or provisions (if applicable):

1059
For the Contract between the City of
Richmond and

EXHIBIT F

INSURANCE PROVISIONS

During the entire term of this Contract and any extension or modification thereof, the CONTRACTOR shall keep in effect insurance policies meeting the insurance requirements specified in the insurance provisions which are attached hereto and incorporated herein by this reference.

1060
___ Exhibit F
___ Section 8
City of Richmond - Insurance Requirements - Type 2:

Professional Services

Type 2 – Page 1 of 3

Revised: September 2011
In all instances where CONTRACTOR or its representatives will provide professional services (architects, engineers, construction management, counselors, medical professionals, hospitals, clinics, attorneys, consultants, accountants, etc.) to the City of Richmond (City), the City requires the following MINIMUM insurance requirements and limits.

CONTRACTOR shall procure and maintain for the duration of the contract, agreement, or other order for work, services or supplies, insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder and the results of that work by the CONTRACTOR, its agents, representatives, employees or subcontractors. Maintenance of proper insurance coverage is a material element of the contract. Failure to maintain or renew coverage or to provide evidence of renewal may be treated by the City as a material breach of contract.

CONTRACTOR agrees that in the event of loss due to any of the perils for which it has agreed to provide Commercial General Liability insurance, CONTRACTOR shall look solely to its insurance for recovery.

CONTRACTOR hereby grants to CITY, on behalf of any insurer providing Commercial General Liability insurance to either CONTRACTOR or CITY with respect to the services of CONSULTANT herein, a waiver of any right to subrogation which any such insurer of said CONTRACTOR may acquire against the CITY by virtue of the payment of any loss under such insurance.

Original, signed certificates and original, separate policy endorsements, naming the City as an additional insured for general liability coverage, as well as a waiver of subrogation for Workers’ Compensation insurance, shall be received and approved by the City before any work may begin. However, failure to do so shall not operate as a waiver of these insurance requirements.

City reserves the right to modify or require additional coverages for specific risk exposures depending on scope of CONTRACTORS work.

Minimum coverage is detailed below. The policy limits of coverage shall be made available to the full limits of the policy. The minimum limits stated herein shall not serve to reduce the policy limits of coverage of CONTRACTOR.

Minimum Scope of Insurance – the following forms shall be provided and coverage shall be at least as broad as the following:

1. Insurance Services Office Commercial General Liability coverage (ISO Occurrence Form CG 0001), and including coverage for bodily and personal injury, property damage, and products and completed operations (if applicable).

2. Insurance Services Office Automobile Liability coverage (ISO Form CA 0001, Code 1, Any Auto).

3. Original and Separate Additional Insured Endorsement for General Liability (ISO Form CG 20 10 11/85 or its equivalent) with primary and non-contributory language.

4. Workers’ Compensation Insurance as required by the State of California including Employer’s Liability coverage.

5. Original and Separate Waiver of Subrogation for Workers’ Compensation insurance.

6. Professional Liability or Errors & Omissions Liability Insurance appropriate to the CONTRACTOR’s profession (if required.)

Required Coverage Minimum Limits
Workers’ Compensation and
Employers’ Liability
Statutory limits as required by the State of California including $1 million Employers’ Liability per accident, per employee for bodily injury or disease.

If CONTRACTOR is self-insured, provide a certificate of Permission to Self- Insure, signed by the California Department of Industrial Relations and Self- Insurance. If contractor is a sole proprietor (has no employees) than contractor must sign “Contractor Release of Liability” found at:
http://www.ci.richmond.ca.us/index.aspx?nid=61.

General Liability
(primary and excess limits
combined)
$2,000,000 per occurrence for bodily injury, personal injury and property damage. If the policy includes a general aggregate, either the general aggregate shall apply separately to this project, service or location or the minimum required aggregate limit shall be twice the per occurrence limit ($4 million aggregate limit).

Policy shall be endorsed to name the City of Richmond as an additional insured per the conditions detailed below.
1061
___ Exhibit F
___ Section 8
City of Richmond - Insurance Requirements - Type 2:

Professional Services

Type 2 – Page 2 of 3

Revised: September 2011
Automobile Liability $1,000,000 per occurrence for bodily injury and property damage.

PROJECT COST R EQUIRED LIMIT
$0 - $1 million $1 million p/o
$1 million - $5 million $2 million p/o
Over $5 million $5 million p/o

Professional Liability or Errors &
Omissions Liability –
Required for all professionals
including architects, engineers,
consultants, construction
management, counselors, medical
professionals, hospitals, clinics,
attorneys and accountants, & other
consultants as may be required by
the City.

Required Policy Conditions
Additional Insured Endorsement

Applicable to General Liability coverage.

The City of Richmond, its officers, officials, employees, agents and volunteers are to be named as additional insureds for all liability arising out of the operations by or on behalf of the named insured including bodily injury, deaths and property damage or destruction arising in any respect directly or indirectly in the performance of this contract.

ISO form CG 20 10 (11/85) or its equivalent is required. If the Contractor is supplying their product or providing a service then the endorsement must not
exclude products and completed operations
coverage. If it does, then CG 20 37 (10/01) is also required.

SAMPLE Endorsements can be found at
http://www.ci.richmond.ca.us/index.aspx?nid=61
.

Primary and Noncontributory The contractor’s insurance coverage must be primary coverage as it pertains to the City, its officers, officials, employees, agents and volunteers. Any insurance or self insurance maintained by the City is wholly separate from the insurance of the contractor and in no way relieves the contractor from its responsibility to provide insurance.

Waiver of Subrogation
Endorsement Form
Contractor’s insurer will provide a Waiver of Subrogation in favor of the City for Workers’ Compensation Insurance during the life of this contract.

SAMPLE Endorsements can be found at
http://www.ci.richmond.ca.us/index.aspx?nid=61.

Deductibles and Self-Insured
Retentions
Any deductible or self-insured retention must be declared to and approved by the City. At the option of the City either the insurer shall reduce or eliminate such deductibles or self-insured retention as respects the City or the CONTRACTOR shall procure a financial guarantee in an amount equal to the deductible or self-insured retention guaranteeing payment of losses and related investigations, claims administration and defense expenses.

Contractor is responsible for satisfaction of the deductible and/or self-insured retention for each loss.

A. M. Best Rating A:VII or Better. If the A.M. Best Rating falls below the required rating, CONTRACTOR must replace coverage immediately and provide notice to City.

Umbrella/Excess Liability Policies
If an Umbrella or Excess Liability Policy is used to meet the liability limits, coverage shall be as broad as specified for underlying coverage’s and cover those insured in the underlying policies.

1062
___ Exhibit F
___ Section 8
City of Richmond - Insurance Requirements - Type 2:

Professional Services

Type 2 – Page 3 of 3

Revised: September 2011
Claims-Made Policies
If any insurance policy is written on a claims-made form: 1) the retroactive date must be shown, and must be before the date of the contract or the beginning of contract work. 2) Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract of work. 3) If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a retroactive date prior to the contract effective date, the Contractor must purchase an extended period coverage for a minimum of five (5) years after completion of contract work.

Subcontractors

CONTRACTOR
shall include all subcontractors as insured under its policies or shall furnish to the City for review and approval, separate certificates and endorsements for each subcontractor. All coverage for subcontractors shall be subject to all of the requirements stated herein.

CONTRACTOR agrees to defend and indemnify the City of Richmond for any damage resulting to it from failure of either CONTRACTOR or any subcontractor to take out or maintain the required insurance policies.

The fact that
insurance is obtained by CONTRACTOR, and/or CONTRACTOR’s subcontractors, will not be deemed to release or diminish the liability of CONTRACTOR, including, without limitation, liability under the indemnity provisions of this contract. Damages recoverable by CITY from CONTRACTOR or any third party will not be limited by the amount of the required insurance coverage.

Verification of Coverage
All original certificates and endorsements shall be received and approved by the City before work may begin .

The City of Richmond reserves the right to require complete, certified copies of all required insurance policies including endorsements affecting the coverage at any time.

Original insurance certificates and required policy endorsements shall be mailed or delivered to the Designated Project Manager for the City of Richmond.

Insurance certificates and endorsements may be faxed to the Designated Project Manger. However, CONTRACTOR must mail the original certificates and endorsements to Designated Project Manager once faxed.

Continuous Coverage
CONTRACTOR shall maintain the required insurance for the life of the contract. Should the CONTRACTOR cease to have insurance as required during this time, all work by the CONTRACTOR pursuant to this agreement shall cease until insurance acceptable to the City is provided. In the event that CONTRACTOR fails to comply with the City’s insurance requirements, the City may take such action as it deems necessary to protect the City’s interests. Such action may include but is not limited to termination of the contract, withholding of payments, or other actions as the City deems appropriate.

If services or the scope of work extend beyond the expiration dates of the required insurance policies initially approved by the City, CONTRACTOR must provide updated certificates and endorsements indicating that the required coverage, terms and conditions are still in place. Renewal certificates and updated endorsements shall be mailed to the Designated Project Manager.

Cancellation
CONTRACTOR shall ensure that coverage shall not be cancelled, reduced or otherwise materially changed except after thirty (30) days’ prior written notice has been given to the City.

Reporting Requirements

Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, its officers, officials, employees or volunteers.

Consistent with Public Policy
The insuring provisions, insofar as they may be judged to be against public policy shall be void and unenforceable only to the minimum extent necessary so that the remaining terms and provisions herein may be consistent with public policy and thus enforceable.

1063

CITY OF RICHMOND
Sanctuary City Compliance
Statement

The undersigned, an authorized agent of (hereafter
"Contractor"), has had an opportunity to review the requirements of City of Richmond Ordinance 12 -18 (hereafter "Sanctuary City Contracting Ordinance" or “SCCO”). Contractor understands and agrees that the City may choose with whom it will maintain business relations and may refrain from contracting with any person or entity that provides Data Broker or Extreme Vetting services to the U.S.

Immigration and Customs Enforcement Division of the United States Department of Homeland Security (“ICE”).

Contractor understands the meaning of the following terms used in the SCCO:

a. "Data Broker” means either of the following:

i. The collection of information, including personal information about consumers, from a wide variety of sources for the purposes of reselling such information to their customers, which include both private-sector business and government agencies;

ii. The aggregation of data that was collected for another purpose from that for which it is ultimately used.

b. “Extreme Vetting” means data mining, threat modeling, predictive risk analysis, or other similar services."

Contractor understands that it is not eligible to receive or retain a City contract if at the time the Contract is executed, or at any time during the term of the Contract, it provides Data Broker or Extreme Vetting services to ICE.

Contractor further understands and agrees that Contractor's failure to comply with the SCCO shall constitute a material default of the Contract and the City Manager may terminate the Contract and bar Contractor from bidding on future contracts with the City for five (5) years from the effective date of the contract termination.

By executing this Statement, Contractor certifies that it complies with the requirements of the SCCO and that if at any time during the term of the Contract it ceases to comply, Contractor will promptly notify the City Manager in writing. Any person or entity who knowingly or willingly supplies false information in violation of the SCCO shall be guilty of a misdemeanor and subject to a $1,000 fine.

Based on the foregoing, the undersigned declares under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed this day of ______ ____ , 20__ , at , California.

Printed Name: Title:

Signed: Date:

Business Entity:

Vendor SCCO Compliance Statement (Augt2020)
Exhibit G
1064

Richmond City CouncilMay 2, 2023

Richmond City Council
May 2, 2023