Contract No. 10781 (CCS)
PROFESSIONAL SERVICES AGREEMENT
This Professional Services Agreement "Agreement", entered into as of January 25, 2019 ("Execution Date"), by and between the City of Santa Monica ("City") and R3 CONSULTING GROUP, INC. Corporation ('R3 CONSULTING GROUP, INC."), is made with reference to the following:
RECITALS:
A. The City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of the City.
B. R3 CONSULTING GROUP, INC. is qualified to do business, and is doing business, in the State of California. R3 CONSULTING GROUP, INC. represents it has the background, knowledge, experience and expertise necessary to provide the services set forth in this Agreement.
C. The City and R3 CONSULTING GROUP, INC. now desire to enter into an agreement for R3 CONSULTING GROUP, INC. to provide professional services to the City.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows:
TERMS AND CONDITIONS
1. Term. This Agreement begins on the Execution Date and terminates on June 30, 2020, unless sooner terminated in accordance with Section 14.
2. R3 CONSULTING GROUP, INC. Services, R3 CONSULTING GROUP, INC. will perform all of the services ("Services") described in Exhibit A, Scope of Services.
R3 CONSULTING GROUP, INC. will complete the Services in accordance with Exhibit B, Budget.
3. City Services. The City agrees to:
3.1 Make available to R3 CONSULTING GROUP, INC. any currently existing documents, data or information required for the performance of the Services.
3.2 Designate a representative authorized to act on behalf of City.
3.3 Promptly examine and render findings on all documents submitted for staff review by R3 CONSULTING GROUP, INC..
4. Compensation. The City will compensate R3 CONSULTING GROUP, INC. for the Services performed in an amount not to exceed $352,075, as set forth in Exhibit B. - 1-
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5. Invoices. R3 CONSULTING GROUP, INC. will invoice the City for the Services in accordance with Exhibit B and the City will pay any undisputed amount within 30 days of receipt.
6. Notices. All notices, demands, requests or approvals to be given under this Agreement, must be in writing and will be deemed served when delivered personally, by email, or on the third business day after deposit in the United States mail, postage prepaid, registered or certified, addressed as follows:
6.1 All notices, demands, requests or approvals to the City:
Resource Recovery & Recycling Division
Public Works Department
City of Santa Monica
2500 Michigan Avenue, Building 9
Santa Monica, California 90404
Attention: Yvonne Yeung
Re: Contract No. 10781
with a copy to:
Santa Monica City Attorney's Office
1685 Main Street, Third Floor
Santa Monica, California 90401
Attention: Susan Cola
Re: Contract No. 10781
6.2 All notices, demands, requests or approvals to R3 CONSULTING GROUP, INC.:
R3 CONSULTING GROUP, INC.
2600 Tenth St., Suite 424
Berkeley, CA 94710
Attention: Garth Schultz
Re: Contract No. 10781
7. Independent Parties. Both parties to this Agreement will be acting in an independent capacity and not as agents, employees, partners, or joint venturers of one another.
Neither the City nor its officers or employees will have any control over the conduct of R3 CONSULTING GROUP, INC. or any of R3 CONSULTING GROUP, INC!'s agents, employees, or subconsultants, except as otherwise provided in this Agreement.
8. Integrated Contract. This Agreement represents the full and complete understanding of every kind or nature whatsoever between the parties. Any preliminary negotiations and agreements of any kind or nature are merged into this Agreement. No oral agreement or implied covenant may be held to vary the provisions of this Agreement. - 2-
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This Agreement may be modified only by written agreement signed by City and R3 CONSULTING GROUP, INC., and approved as to form by the City Attorney.
9. Insurance. Prior to commencing work, R3 CONSULTING GROUP, INC. must procure, maintain and pay for insurance against claims for injuries to persons or damage to property that may arise from or in connection with the performance of the Services by R3 CONSULTING GROUP, INC. or R3 CONSULTING GROUP, INC.'s agents, representatives, employees or subconsultants for the duration of this Agreement. R3 CONSULTING GROUP, INC. must obtain insurance that, at a minimum, meets the requirements for insurance set forth in Exhibit C, Insurance Requirements and Verifications.
10. Defense and Indemnification.
10.1 Indemnification. As to R3 CONSULTING GROUP, INC's Services produced under this Agreement, R3 CONSULTING GROUP, INC. agrees to defend, indemnify, protect, and hold harmless the City, its agents, officers,. boards and commissions, and employees (collectively, "City") from and against any and all liability, claims, demands, damages, or costs, including but not limited to attorney's fees, or payments for injury to any person or property (collectively, "Losses") caused or claimed to be caused by the acts, errors and/or omissions of R3 CONSULTING GROUP, INC., or R3 CONSULTING GROUP, INC.'s employees, agents, officers, and subconsultants. R3 CONSULTING GROUP, INC.'s responsibilities under this Section 10.1 include liability arising from, connected with, caused by, or claimed to be caused by the active or passive negligent acts or omissions of the City, which may be in combination with the acts or omissions of R3 CONSULTING GROUP, INC., its employees, agents or officers, or subconsultants; provided, however, that R3 CONSULTING GROUP, INC's duty to defend, indemnify, protect and hold harmless shall not include any Losses arising from the sole negligence or willful misconduct of the City. Notwithstanding R3 CONSULTING GROUP, INC!'s obligation to defend City hereunder, City has the right to conduct its own defense and seek reimbursement for reasonable costs of defense from R3 CONSULTING GROUP, INC., if City chooses to do so.
10.2 Enforcement Costs. R3 CONSULTING GROUP, INC. agrees to pay any and all costs the City incurs enforcing the indemnity, defense and hold harmless provisions set forth in Section 10.1.
11. Prohibition Against Transfers.
11.1 R3 CONSULTING GROUP, INC. may not assign, hypothecate, or transfer this Agreement or any interest therein directly or indirectly, by operation of law - 3-
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or otherwise without the prior written consent of City. Any attempt to do so without the City's consent will be null and void, and any assignee, hypothecatee or transferee acquires no right or interest by reason of such attempted assignment, hypothecation or transfer.
11.2 The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of R3 CONSULTING GROUP, INC. or of any general partner or joint venturer or syndicate member of R3 CONSULTING GROUP, INC., if a partnership or joint venture or syndicate exists, which results in changing the control of R3 CONSULTING GROUP, INC., will be construed as an assignment of this Agreement. Control means 50% or more of the voting power of the corporation.
12. Permits and Licenses. R3 CONSULTING GROUP, INC., at its sole expense, must obtain and maintain during the term of this Agreement all required business and professional permits, licenses and certificates.
13. Waiver. A waiver of any breach of this Agreement may not be deemed a waiver of any subsequent breach of the same or any other term, covenant, or condition of this Agreement.
14. Default and Termination.
14.1 If R3 CONSULTING GROUP, INC. fails or refuses to perform any of the provisions of this Agreement, and if the default is not cured within a period of five days after the City's written notice of default specifying the nature of the default, City may immediately terminate this Agreement by written notice to R3 CONSULTING GROUP, INC..
14.2 The City has the option, at its sole discretion and without cause, of terminating this Agreement by giving ten days' written notice to R3 CONSULTING GROUP, INC.. Upon termination of this Agreement, City will pay R3 CONSULTING GROUP, INC, any compensation earned and unpaid up to the effective date of termination.
15. Compliance with Law. R3 CONSULTING GROUP, INC. must comply with all laws of the State of California and the United States, and all ordinances, rules, and regulations enacted or issued by City.
16. Discrimination. R3 CONSULTING GROUP, INC. may not discriminate in the provision of services hereunder because of race, color, religion, national origin, ancestry, sex, age, sexual orientation, marital status, AIDS or disability.
17. Nuisance. R3 CONSULTING GROUP, INC. may not maintain, commit, or permit the maintenance or commission of any nuisance in connection with the performance of services under this Agreement.
18. Records.
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18.1 R3 CONSULTING GROUP, INC. must maintain complete and accurate records with respect to costs, expenses, receipts and other such information required by the City for any services provided where compensation is on the basis of hourly rates, subconsultant costs, or other direct costs. R3 CONSULTING GROUP, INC. must keep the records, together with supporting documents, separate from other documents and records and maintain them for a period of three years after receipt of final payment.
18.2 R3 CONSULTING GROUP, INC. must maintain records in sufficient detail to permit an evaluation of the Services and in accordance with generally accepted accounting principles. R3 CONSULTING GROUP, INC. must clearly identify all records and make them readily accessible to the City. At the City's request, R3 CONSULTING GROUP, INC. must provide records in an electronic format and, if necessary, access to any proprietary software to view such electronic records.
R3 CONSULTING GROUP, INC. must allow the City to have free access to R3 CONSULTING GROUP, INC's books and records and to inspect all work, data, documents, proceedings and activities related to this Agreement.
The City has the right to examine or audit R3 CONSULTING GROUP, INC's records, and R3 CONSULTING GROUP, INC. agrees to cooperate with any examination or audit of its records. If a City audit discloses an error of 5% or more in information reported by R3 CONSULTING GROUP, INC., R3 CONSULTING GROUP, INC. agrees to pay the cost of the City's audit computed on the basis of four times the direct payroll of the audit staff completing the audit and audit report.
19. Work Product; Reports.
19.1 Any work product prepared or caused to be prepared by R3 CONSULTING GROUP, INC. or any subconsultant for this Agreement will be the exclusive property of City. No work product given to or prepared by R3 CONSULTING GROUP, INC. or any subconsultant pursuant to this Agreement may be made available to any individual or organization by R3 CONSULTING GROUP, INC. without prior written approval by City.
19.2 At the City's request, R3 CONSULTING GROUP, INC. must furnish reports concerning the status of the Services:
20. Standard of Care. R3 CONSULTING GROUP, INC. agrees to provide all Services, including services performed by any subconsultant, in a manner consistent with the level of care and skill ordinarily exercised by members of R3 CONSULTING GROUP, INC's profession currently practicing in the same locality under similar conditions.
21. Subconsultants.
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21.1 If R3 CONSULTING GROUP, INC. proposes to have any subconsultant perform any part of the Services, R3 CONSULTING GROUP, INC. must submit a request for approval in writing, describing the scope of work to be subcontracted, the name of the proposed subconsultant, and the total price or hourly rates used in preparing an estimated cost for the subconsultant's services. The City, in its sole discretion, may grant or deny the request.
21.2 R3 CONSULTING GROUP, INC. will be responsible for the quality of any subconsultant's work. Every subcontract or agreement of any kind entered into between R3 CONSULTING GROUP, INC. and any subconsultant (or between any subconsultant and others) must contain the following provision:
This agreement is consistent with all terms and conditions of the Agreement No. 10781 (CCS) entered into between the City of Santa Monica and R3 CONSULTING GROUP, INC. on
22. Governing Law. The laws of the State of California, without regard to any choice of law provisions, will govern this Agreement.
23. Venue and Jurisdiction. The City and R3 CONSULTING GROUP, INC. agree that the Services will take place in Los Angeles County. Any litigation arising out of this Agreement may only be brought in either the United States District Court, Central District of California, or the Superior Court of California, County of Los Angeles, West District, as appropriate. The parties agree that venue exists in either court, and each party expressly waives any right to transfer to another venue. The parties further agree that either court will have personal jurisdiction over the parties to this Agreement.
24. Survival of Provisions and Obligations. Any provision of this Agreement, which by its nature must be exercised after termination of this Agreement, will survive termination and remain effective for a reasonable time. Any obligation that accrued prior to termination of this Agreement will survive termination of this Agreement.
25. Exhibits. The following exhibits are incorporated by reference into this Agreement as though fully set forth herein.
Exhibit A Scope of Services
Exhibit B Budget
Exhibit C Insurance Requirements
In witness whereof, the parties have caused this Agreement to be executed the day and year first above written.
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CITY OF SANTA MONICA,
ATTEST:
tense Andeen Sin
DENISE ANDERSON-WARKEN
City Clerk City Manager
APPROVED AS TO FORM:
Save
Day p.
LANE DILG
City Attorney
R3 CONSULTING GROUP, INC.
Corporation
Ith Shith
By: _
Name: GARTH Scuuctr
Title: PRINCIPAL
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August 2017
Exhibit A
Scope of Services
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City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Scope of Services Section 5
The City has indicated the desire to complete the Rate Study and Financial Analysis in time for Council adoption of proposed rates in October 2019 - on roughly the same time schedule as Project Work the City's Water/Wastewater Rate Study, which is currently under way. In order to achieve Plan
ahe imen award racet actor novesume that this Bage ement will ten immediatelY ter Council award or a contract on November 2/
end of November, the R3 Project Team will present a Draft Rate Study at a Council Study Session on or around May 21, 2019. Following the Study Session in May, we anticipate development of a Final Report, final opportunities for community engagement, and then presentation of a Final Rate Study on or around August 27, 2019. The R3 Project Team will support the City's issuance of a 45-day Proposition 2018 Notice to rate payers, which is anticipated to be issued on or around the week of September 3, 2019. A Public Hearing of Rate Adoption is anticipated following the 45-day Notice, occurring on or after October 22, 2019.
Task 1 Information Request, Review, and Analysis
Objectives
Above all, this task's purpose is to engage R3 Project Team members and City staff to discuss critical project details while requesting and obtaining valuable data for the success of this o the Rate study. Operational Analvsis
prepare a detailed information request and agendas reflecting those items for the kick-off meeting and interviews with City staff. Our objective is to establish a strong, supportive working relationship with City staff as well as effective communication and coordination.
Approach
Upon authorization to proceed, the R3 Project Team will work with City staff to schedule the kick-off meeting and City staff interviews, to take place within two weeks of the City's authorization to proceed. The R3 Project Team will generate preliminary lists of reports, documentation, and data anticipated to be necessary to complete the Rate Study, Operational Analysis, and Billing Audit. R3 will consolidate those lists and submit them electronically as one organized, detailed Request for Information (RFI) to City staff, one week prior to the kick-off meeting.
Following receipt of the requested information, R3 will disseminate it to R3 Project Team members via secure file-sharing system. R3 will identify any additional requirements or issues to be discussed at the Task 2 kick-off meeting. All Project Team members will review and analyze applicable data and come fully prepared to discuss it, ask pertinent follow-up questions, and acquire additional information during the kick-off meeting and subsequent interviews with City staff.
The above-outlined process accomplishes three objectives. First, this information-gathering and dialogue is the foundation for assessing and evaluating the operations and management systems and is essential to the success of the project based on our experience with similar operational assessments. Second, it identifies areas where important information is missing and may need to be developed. Lastly, it requires City staff to focus on back office information R3 and procedures that may be critically essential to managing an efficient and productive operation whose goal is continuous improvement. The R3 Project Team's RFI to the City may include, but will not necessarily be limited to, questions about the following: Page 63 of 104 City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Section 5 General Management, Organization, and Industry Information • City and RRR Division Organizational charts, including number of employees by job classification and reporting relationships;
Project Work
• City's Mission and Vision Statements;
Plan
• Strategic Planning Objectives/Business Plan;
• Current solid waste policies, procedures and regulatory requirements; • Employee manuals and work rules (e.g., training, safety, policies, and procedures); • Copies of Human Resources job descriptions for management and supervisory positions;
• Sample copies of annual employee review forms;
• List of performance benchmarks that are routinely tracked and reported to management and/or staff;
• Prior operational or management studies, reports, and analyses performed internally or by outside consultants;
• City safety officer's name and contact information;
• List of all existing safety performance benchmarks, current and historical results relative to those benchmarks, and examples of how these data are communicated to the staff;
• Sample supervisor Route Observation Forms and related policies and procedures; • Worker's compensation and on-the-job injury records (OSHA 300 and 300A forms) for at least the past five years;
• Average number of light-duty or restricted-duty employees and average time an employee is on limited or light duty;
• Sample accident investigation reports for OSHA recordable injuries; • Copies of existing and proposed recycling contacts;
• Historical vehicle accident records; and
• Procedures for identifying and controlling overweight vehicles.
Operational Data - Staffing, Routing, & Vehicles
• Organizational charts for RRR Division;
• Accounting of employees on limited work, light duty, and why; • staff performance standards and how their performance is measured against them; • List of all services and service levels for City solid waste customers; • Historical data on workplace accidents and injuries;
• Number of residential and commercial customers;
R3 • Customer subscription levels by customer rate class; • List and address of all facilities to which materials are delivered;
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division • List of all residential and commercial routes by day, vehicle type, and associated crew Section 5 SIze;
• Daily and weekly residential accounts serviced by each route; Project Work
• Daily and weekly commercial lifts for each commercial route; Plan
• Vehicle and equipment list;
• Equipment replacement schedules;
• List of all existing operational performance benchmarks and current and historical results relative to those benchmarks (historical operating and productivity data); • Route maps and procedures used to determine daily route workloads (accounts/route/day;
• Description of methods for collecting missed containers; • Average green waste participation rates with seasonal fluctuations noted; • Projected annual residential and commercial account growth rates; • Historical monthly tonnage data by collection line of business; •Electronic list of daily vehicle load weights from landfills/transfer stations/processing sites for one-year period;
• Number of weekly collection routes by line of business; • Vehicle availability reports;
• Fleet maintenance performance benchmarks, current and historical results relative to those benchmarks, and examples of how these data are communicated to staff; • Inventory of all rolling stock used for solid waste collection operations with primary and backup vehicles noted along with legal payloads for each vehicle; • Current vehicle replacement schedule;
• Customer service policies and procedures (e.g., process or instructions for handing customer complaints, stops/starts etc.) and how those changes are communicated to the City;
• Copy of the information that is tracked relative to customer complaints (e.g., date of complaint, type, method of resolution and date of resolution) for the past year; and • List of all customer service performance benchmarks (e.g., average number of calls per day; average hold time, dropped calls, etc.), current and historical results relative to those benchmarks.
Rate, Financial, & Billing
• Functionality and capabilities of the NorthStar system, and the City's ongoing experiences with customer billing;
• Required/desired improvements to customer billing system; • Current City rate policies, procedures and regulatory requirements; R3 • Chart of customer accounts;
• Current approved rate schedules; Page 65 of 104
• Financial and budgetary reports;
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Section 5 Historical revenue and expense line-item data; FY 2017-19 line-item budget and year-to-date expenditures; Detailed accounting of RRR Enterprise Fund;
Project Work
Plan RRR's mandatory financial contribution to the City Yards Modernization Plan; Budget breakdown, by programs, for City's new performance-based budgeting; Capital projects expense projections;
• Current solid waste development fee amounts;
• Current fiscal-year revenue and expense line-item budget:
• Any one-time or periodic revenues and non-customer rate revenues should be clearly identified; and
• Any one-time or periodic expenses that are not normal ongoing expenses should be clearly identified.
• Current reserve accounts and balances, with intended uses noted, and most recent Fiscal Year ending balances;
• Current and projected capital projects expenses and schedules; • Sample financial system reports from the City's financial system to facilitate incorporation into the ten-year financial plan and Rate Study Model; • Projected annual customer growth and/or City projections for business, development, and population growth for the next five years;
• Current recycling processing contract (expiring June 2019) with Allan Company, and projected expenses;
• Current and potential future organics collection with Simi Valley landfill; and • Vehicle and equipment replacement fund and reserves.
R3 will review the provided data and identify any additional requirements or issues to be discussed at the Task 2 kick-off meeting. R3 requires City staff's timely and thorough response to our RFI in order to honor our agreed-upon schedule.
Task 1 Deliverables
• One (1) consolidated, detailed Request for Information and documentation submitted to City staff via email one week prior to the kick-off meeting; and • One (1) review of received information, with follow-up as needed.
Task 2 Kick-Off Meeting with Staff Interviews
Objectives
The R3 Project Team will prepare and conduct a productive, efficient kick-off meeting and individual interviews with City staff to review and solidify project goals, objectives, and work R3 scope.
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Approach Section 5
R3 believes that successful projects begin with a mutual understanding and confirmation of key project objectives, goals, tasks, schedules, client interests, and expectations. We also know the value of establishing a communication protocol to facilitate the successful, timely Project Work execution of the project to the satisfaction of the City. To that end, the R3 Project Team will Plan work with City staff to conduct the kick-off meeting and City staff interviews. Attendees will include key R3 Project Team staff and should include key City staff knowledgeable of all aspects of billing, staffing, routing, fleet, rates, and finances, at the City's discretion. R3 will prepare and distribute the meeting agenda and will lead the meeting in coordination with City staff.
We suggest that the kick-off meeting include discussion and review of these topics:
• Scope of work, deliverables and schedule;
• Available data and the status of any outstanding requested information; • Schedule for that day's staff interviews;
• City staff expectations and desires regarding project communications between R3 and the City;
• Schedule for regular biweekly updates via conference call or email to City staff; • Management's input on strengths and weaknesses of the City's policies, procedures, and operations;
• Recent successes and challenges and significant opportunities for improvement; • staff safety and how to lower preventable accidents and injuries; • staff culture, accountability, and ownership;
• Current rate policies and historical rate issues;
• Current and historical revenue and expenses;
• Current rate model and required characteristics and attributes of an updated and amended rate model;
• Cost-of-service expense allocations;
• Growth projections;
• RRR Enterprise Fund and factors affecting its long-term sustainability; • Other reserve funds;
• Regulatory and marketplace changes impacting costs;
• staffing, routing, and vehicle operations and their efficiency issues; • Functionality and capabilities of the NorthStar system, and the City's ongoing experiences with customer billing;
• Pros/cons of current collection system and routes;
• Performance evaluation methods;
• Data collection issues; R3
• Budgets for route optimization efforts for equipment, staffing, and other support; • Anticipated new programs and/or changes in operations or service levels; and Page 67 of 104 • Other questions and comments related to the successful completion of the project.
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Section 5 On the same day, immediately following the kick-off meeting, the R3 Project Team will conduct multiple follow-up interviews, by subject area, with various City staff. Interviewees may include management, GIS staff, data analysts, route supervisors, and drivers. The R3 Project Team Project Work project budget and timetable assume that City staff will attend the kick-off meeting, and efficiently schedule and ensure availability for interviews with requested staff. It further Plan
assumes that City staff will provide meeting space for the kick-off meeting and interviews.
Task 2 Deliverables
• Coordinate with City staff to schedule the kick-off meeting and interviews as well as on-site meeting locations;
• One (1) kick-off meeting and interview agenda; and
• Facilitation of kick-off meeting and interviews with City staff.
Task 3 Staffing, Routing, and Vehicle Efficiency Analysis Objectives
The outcomes of this analysis will ultimately lead to the development of comprehensive recommendations on how to improve operational functionality and efficiency, ensure fiscal prudence throughout operations, instill best practices to reduce accidents and heightened emphasis on safety, develop and enhance management systems and reporting to foster continuous improvement, and to establish the tracking of key operational metrics to establish benchmarks and obtainable, impactful goals for RRR's operations.
Approach
After examining existing staffing, routing, and vehicle information and reports, and conducting onsite visits and interviews of City staff and customers, the R3 Project Team will conduct an evaluation using a variety of tools and provide a detailed analysis of these functions.
The outcomes of the R3 Project Team's work will lead to the development of comprehensive recommendations on how to improve operational functionality and efficiency, ensure fiscal prudence throughout operations, develop and enhance management systems and reporting to foster continuous improvement, and establish the tracking of key operational metrics to develop benchmarks and obtainable, impactful goals.
The R3 Project Team will consolidate outcomes from these Tasks and prepare an analysis that will include preliminary findings and recommendations. These findings and recommendations will be shared with City staff for review, comment, and clarification via our Draft Report. The Report will include detailed operational metrics, costs, and associated analysis, and a narrative explaining the scope of the analysis, findings, and recommendations.
Task 3.1 Develop and Distribute Operations Questionnaire and Data Request to Cross Section of City Staff
The R3 Project Team's operational assessment questionnaire and data request will be adapted for this project and submitted to identified City staff with the input of City staff. We will provide the questionnaire in both hard copy form and online for ease of use by participants. The survey R3 responses will be compiled and consolidated, and any further questions or clarifications will be pursued in a timely manner. The results of this questionnaire, and the documents and data obtained, will be used to guide our assessment of various aspects of the operation and
management systems.
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Task 3.2 On-site and Field Research for Staffing, Routing and Vehicle Efficiency Section 5 Analysis, Conduct On-site Interviews and Observe Operations R3 Project Team staff will be deployed to obtain documents from City staff and conduct field observations and on-site interviews. During the visits, firsthand observations are made of the Project Work operation in action, at the facility and in the field. All aspects of the operations are reviewed, Plan from fixing flat tires to routing and systems management and reporting. In addition, interviews are conducted with a cross section of the staff— managers, supervisors, customer service representatives, and drivers- using several comprehensive checklists that have been developed and continuously refined over the past two decades of our experience. The checklists will be tailored to meet the specificity required for this project. This is a valuable opportunity to gain insight to the operation, determine what works and does not work, what improvements can be made, and how to track relevant metrics and establish feasible goals.
As part of this work, photographs and videos are taken solely to document observations, and personal privacy is ensured. In instances where persons are recognizable in recorded images, we ensure individual permission is provided prior to using these recordings. In addition, interviews are never recorded or videotaped.
Task 3.3 Review Routing and Scheduling - Efficiency of Collection Operations • Determine collection routes statistics;
• Establish overall units serviced;
• Identify units per route;
• Identify equipment used;
• Identify level of Supervision;
Evaluate Routing software; and
Evaluate current routing procedures (e.g., When was routing last completed? What was the rationale to modify routing and the process used to establish routes? How frequently is routing adjusted and why?);
• Determine and verify collection services routing productivity (e.g., the number of daily and weekly collection routes by route type, frequency of collection of the various service offerings, use of overtime);
• Document internal process and procedures to monitor collection route efficiency; • Determine process to evaluate and accommodate changes and growth in number of accounts and services provided;
• Review late set out procedures;
• Determine use of extra routes for service issues;
• Evaluate the sufficiency of driver pools and staffing; • Review and evaluate routes consistently unable to finish on time; • Evaluate the adequacy of equipment levels;
• Evaluate vehicle maintenance based on daily reports submitted by drivers; and R3 • Prepare findings on the efficiency and effectiveness of the current route management system and practices, and identification of specific and practical recommendations to
address any deficiencies identified.
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Section 5 Task 3.4 Review Personnel - Overall Organizational Structure and Management Systems and Procedures
• Obtain an overall understanding of the 115-person organizational structure and Project Work staffing by reviewing the role, function, and chain of command of staff:
Plan • Organizational structure (organization chart);
• Department and Division heads;
• Managers;
• Supervisors;
• Support staff; and
• Direct labor.
• Identify and document details related to staffing the operation:
• FTE, PTE, and temporary head count;
• Turnover frequency and hiring practices;
• Job function and descriptions;
• Employee performance evaluation criteria and process; Effectiveness and efficiency of staff;
Assess how departments, managers, staff, and direct labor communicate and work together; and
Conduct organizational culture evaluation:
Review staff safety issues and identify ways to lower preventable accidents and injuries:
• Review the City's workers compensation claim records; • Interview City's safety office;
• Determine causes of workers compensation claims; and
• Evaluate operational changes to improve safety.
• Identify and review management systems and decision-making:
• Written management protocols, policies, and procedures; • Decision-making practices;
• Budgeting process and criteria; and
Recommendations and other approval requirements.
Task 3.5 Review Staffing Practices, Including the Deployment of Management and Supervisory Personnel
Supervision and Direction of Management Personnel:
R3 • Evaluate staff supervision and oversight;
• Determine the supervisor-to-staff ratio;
• Determine how management goals are delineated, tracked, and reported; and City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division • Determine the focus and commitment to employee management, metrics, Section 5 and employee evaluation.
Task 3.6 Review Collection Vehicles - Procedures for Maintenance, Safety Check, and Replacement of Equipment Project Work
• Obtain Vehicle Detail Information, including items such as: Plan • Truck manufacturer;
• Body type and manufacturer;
Vehicle year;
• Vehicle tonnage and cubic-yard capacity;
• Vehicle purchase price; and
• Age of fleet.
• Evaluate Vehicle Maintenance Practices and Procedures:
• Review and assess preventative maintenance program and staffing; Identify ways to lower preventable accidents and injuries; Review vehicle repair procedures and costs;
Review vehicle repair schedules;
Review tire management procedures;
Compare practices and costs with industry standards;
Evaluate compliance with legal requirements;
Evaluate the inventory of parts procedures (how long to receive); Evaluate vehicle down time;
Evaluate truck cleanliness;
Review vehicle condition report process and paper work; Review Pre/Post vehicle inspections;
Evaluate equipment replacement practices;
• Compare practices and costs with industry standards; and • Evaluate compliance with legal requirements.
Task 3.7 Review Utilization and Management of Equipment, Personnel, and Facilities
Evaluate capital utilization, availability, and efficiency factors of the following compared to industry standards:
• Vehicles;
• Equipment;
R3
• Personnel; and
• Facilities.
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Section 5 Task 3.8 Review Procedures for Receiving and Resolving Subscriber Complaints and Concerns
Review customer service operations and procedures;
Project Work
• Evaluate customer service systems and software;
Plan
• Evaluate customer service personnel training and experience; and • Determine and evaluate how the City responds to daily collection issues such as customer complaints and service requests, missed pickups, driver absences, equipment breakdowns, vehicle accidents, and traffic problems; identify potential improvements and make recommendations for implementing an efficient tracking system.
Task 3.9 Evaluate Transfer Station Costs and Opportunities Review the costs of contracting with the City's third-party facility, Southern California Disposal;
• Develop a cost proforma for the City's third-party facility, and cost projections for the operation to potentially use an alternative facility; and • Compare operational, logistical, and cost considerations between the two scenarios.
Task 3 Deliverables
• One (1) Questionnaire and data request to City staff; • On-site field research and observations;
• One (1) completed analysis of current routing and scheduling efficiencies and opportunities for increased efficiency;
• One (1) completed analysis of RRR organizational structure, management system, and safety procedures;
• One (1) completed analysis of staffing practices;
• One (1) completed analysis of collection vehicles, maintenance, replacement, and safety;
• One (1) completed analysis of equipment, personnel, and facilities management and utilization;
• One (1) completed analysis of procedures for resolving customer complaints and concerns;
• One (1) completed analysis of post-collection opportunities and alternatives; and • Preparation of analysis, findings, and recommendations for inclusion in Draft and Final Reports.
Task 4 Billing Audit
Objectives
R3
The RRR Division currently shares the NorthStar customer billing system that was designed for the City's Water Resources Department and provides combined bimonthly billing by the
specifically designed for the solid waste industry, it does not allow for routing solutions, route City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division:
sheets, or expanded solid waste customer service information. As such, it runs the inherent Section 5 risk of producing customer billing errors. The R3 Project Team will review the NorthStar customer billing records and City routing data to conduct primary data analysis to test the accuracy of RRR's current solid waste customer billing. Project Work Plan
Approach
The R3 Project Team will conduct a comprehensive Billing Audit of the residential and commercial customer information contained in the NorthStar billing system and the City's operations routing data. We will research, compile, and analyze several levels of information related to customer billing and details, customer subscription levels, data collection and management, rates, service levels, and revenue, in order to ensure a comprehensive audit of the customer billing system and associated processes. In short, the R3 Project Team will determine if the City has been accurately billing all of its customers based on a paper review of billing records in NorthStar as compared to the City's routing records.
Should the City desire, Optional Task B (outlined at the end of Section 5) provides the opportunity to supplement this Billing Audit with field verification of a sampling of containers in the field to determine the degree to which the City's routing records accurately represent actual containers and services provided to customers in the field.
Task 4 Deliverables
• One (1) complete billing audit comparing NorthStar billing information to the information contained in the City's routing records;
• Identification and analysis of billing vs. routing discrepancies; and • Preparation of analysis, findings, and recommendations for inclusion in Draft and Final Reports.
Task 5 Technology and Systems Review
Objectives
The purpose of this task is to evaluate the current technology system(s) used by the City, to identify and evaluate the costs, efficiency, and effectiveness of several operations systems enhancements, and to provide recommendations on whether the systems would be cost- effective and beneficial to the City. This will include a comparison of the capabilities of the NorthStar systems to other billing and routing technology systems.
Approach
The City identified its current billing system (NorthStar) for inclusion in this review, and the R3 Project Team will provide a detailed review of its features to explore additional functional enhancements. We will investigate the drawbacks for the RRR Division of sharing a system with the Water Resources Department that wasn't designed for solid waste operations, and the possibility of creating a new, separate system that would be custom-designed for RRR's specific needs. Additionally, we will investigate the possibility of creating a system that could be shared across departments once the Water Resources Department's contract with NorthStar ends in June 2020, in order to effect City-wide cost-savings and system-wide efficiencies. R3 In addition, we propose consideration of additional operations systems for evaluation, as follows: Page 73 of 104
• Integrated Customer Service/Accounting/Billing System; City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Section 5 RFID Tag Identification System;
• Mobile Application Software (Smartphone App);
Project Work GIS Mapping Software;
Plan Tablet-Based Information Center in Trucks;
Upgraded Field Communications;
On-Board Interior/Exterior Camera Monitoring System;
On-Board Scales; and
Sonar sensors in bins.
The R3 Project Team's approach to include a wide range of alternatives in this technology system review is to assist with improving any current shortcomings and to also introduce technological enhancements to improve other aspects of field operations including container inventory management and tracking, field communications, management by metrics by collecting and storage of operational performance data, safety practices, customer service, and operational efficiency.
The R3 Project Team's review of the current technology systems used will entail interviewing staff, on-site observations, and primary research on potential operations enhancements, as follows:
Task 5.1 Review and Document Current Technology and Systems Used by the City
The R3 Project Team will review and assess the current technology and systems used by the City. This review will entail conducting interviews of staff to determine the scope and function of the various technologies used in the operation, and on-site observation and valuation of the systems used.
Task 5.2 Conduct a Comprehensive Functional Analysis of NorthStar The R3 Project Team will meet with City staff and research the technical specifications and functionality of the NorthStar billing system. Our review and analysis will focus on potential unused functions the system offers that the City can leverage to improve various aspects of its operations including billing accuracy, customer service delivery, operational efficiency, and management controls.
Task 5.3 Comparison of NorthStar with Other Integrated Systems The results of Task 5.2 will be used to compare the full scope of functionality of the NorthStar system with other Integrated Customer Service/Accounting/Billing systems. A matrix will be prepared that explores the relative similarities and differences of the NorthStar system and other Integrated Systems.
Task 5.4 Review Possible Technology Systems with Staff
The R3 Project Team will review with staff potential technical system options and determine the feasibility of pursuing these enhancements. A brief analysis and description of each potential technology enhancement will be used to brief staff about the scope and potential R3 benefits. This preliminary analysis and description will include the following potential options:
• Integrated Customer Service/Accounting/Billing System;
• Mobile Application Software (Smartphone App);
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division • GIS Mapping Software; Section 5
• Tablet-Based Information Center in Trucks;
• Upgraded Field Communications; Project Work
• On-Board Interior/Exterior Camera Monitoring System; Plan • On-Board Scales; and
• Sensors in Commercial Bins.
Task 5.5 Evaluate Technology System Enhancements, Use, and Cost Based on City staff's direction, The R3 Project Team will then proceed with providing a detailed analysis and cost assessment of the potential technology system enhancements included in Task 5.4. The evaluation will entail exploring the practical functions of the technology, benefits, implementation timeframe, training and use implications, cost, and its overall value relative to the City's operations. In addition, based on staff's direction to proceed, we will explore the possibility of the City Water Department's joint use of the various Integrated Systems included in the analysis.
Task 5.6 Prepare the Technology Systems Analysis
The R3 Project Team will analyze the results of the evaluation and assessment conducted in
5.2 and 5.3. The report will document the scope of these systems, their functionality, shortcomings and strengths, and other factors associated with determining the cost-benefit analysis of investing and using the technology. The findings will be provided to the City in the Draft Report as part of Task 9.
Task 5 Deliverables
• Detailed analysis of the NorthStar system and other potential technology systems enhancements to improve operations and efficiency;
• A comparison of the NorthStar System with other integrated systems; and • Preparation of analysis, findings, and recommendations for inclusion in Draft and Final Reports.
Task 6 Zero Waste Strategic Operations Plan Review and
Update
Objectives
In 2014 the City implemented its ambitious Zero Waste Plan, which is now in its "medium term" years, (2016-2022), and includes these six goal areas: waste reduction; environmental benefits; economic benefits; city leadership; producer responsibility; and zero waste culture change.
The Zero Waste Plan activated a series of City policies, programs, and infrastructure to counteract the environmental and financial effects of an anticipated waste disposal increase of over 220 tons per year through 2030. Among the mandatory programs are specific product and material bans, a C&D ordinance revision, and a phased implementation of increasingly more stringent diversion rates.
R3
To assist the City in updating its 2014 Zero Waste Plan, the R3 Project Team envisions a data- driven, focused effort to establish the areas in which the City is making progress on strategies identified in the current Zero Waste Plan, and to provide suggested revisions to those Page 75 of 104 strategies, their costs and diversion estimates, and their implementation rate impacts and timelines. Our Review and Update will consider current conditions and will assess if the City City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Section 5 can realistically achieve its goal of 95% diversion from the Simi Valley landfill by 2030. We will also recommend additional strategies to further the City's progress towards its zero waste goals in the event that current strategies are not sufficient, or if previously proposed strategies Project Work have been determined by the City to be no longer feasible.
Plan We will tailor the Plan to the unique disposal and waste reduction trends, goals, and challenges, (e.g., improper disposal of waste and recycling by City residents; lack of space for additional organics bins at multifamily dwellings), of the City of Santa Monica, while stepping beyond the existing and well-tested boundaries of zero waste planning. This Zero Waste Plan will be executable within, and measured by, short- and long-term milestones, and will incorporate metrics for tracking for customer participation, and AB 1826 commercial recycling compliance.
R3 will provide project and deliverables management with task support by the R3 Project Team. Components will include a Waste Diversion Model that will contain accurate disposal tonnage projections and identified potential for diversion in various sectors, by material type.
The plan development will also include a vigorous stakeholder engagement process, which will entail stakeholder meetings, information gathering at key City organizations, a community survey, and City staff/City Council feedback.
The update to the Zero Waste Plan will be a comprehensive document that includes key recommended policy, program, partnership and facility diversion options, with an analysis of the economic, diversion, and financial impact to the City as well as a timeline and steps for implementation. We believe our Scope of Services provided below includes innovative approaches related to stakeholder engagement, identifying best use of current facilities through revised policies and programs, developing strategic education and outreach campaigns that target certain materials, and other elements to be developed as part of the Zero Waste Plan.
Approach
Task 6.1 Evaluate the Plan and Review Effectiveness of Current Programs The first step in updating the City's current Zero Waste Plan will be to conduct a high-level review of the City's diversion policies and programs established to date. R3 will evaluate the implementation status and effectiveness of the main recommendations of the Plan: increasing voluntary participation; adding mandatory requirements; and residual waste processing.
Specifically, we will analyze the degree to which each suggested program has been implemented, including changes in diversion. The R3 Project Team will also analyze the overall effectiveness of other diversion programs currently in place in the City through a review of those programs, detailed tonnage reports and subscription levels from the City's solid waste hauler, and tonnage information reported to the State.
Based on current City-wide diversion performance, the R3 will project the City's future disposal up to 2030 for comparison with the Zero Waste Plan 2030 zero waste target (i.e., achievement of a City diversion rate of 95% or a per capita disposal rate of 1.1 pounds/person/day; and reduce Greenhouse Gas emissions by 18,573 MTCE by 2030). The baseline projection under "business as usual" will provide an indicator of whether the City is on track, or not on track, to meet its current diversion goal. If appropriate, R3 may recommend a revised zero waste goal R3 and timeline for the City that is both ambitious and achievable based on current data.
For context, the City has shown an overall decreasing trend in pounds per person per day (PPD)
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division a 75% diversion rate equivalent. CalRecycle calculated the City's PPD as 4.5 in 2016, a diversion Section 5 rate equivalent of 76%.
Task 6.2 Enhance Effectiveness of Current Programs & Recommend New Programs Project Work After completing the tasks outlined above, R3 will develop a recommended set of zero waste Plan strategies with the greatest potential of diverting waste from landfills through 2030, and beyond. These strategies will build off of the City's 2014 Plan objectives to:
• Reduce Greenhouse Gas Emissions: support the City's goal of reducing Citywide greenhouse gas emissions by 18,573 MTCE and converting City fleet vehicles to clean fuels by 2030;
• Improve Source Reduction: reduce the overall solid waste generated within the City and quantity generated per person through waste prevention and recycling; • Increase Diversion: increase the quantity of recyclable and compostable materials diverted from landfills and have recycling and composting at City facilities; and • Promote Extended Producer Responsibility: support state and federal efforts to place a shared responsibility for end-of-life management of consumer products on manufacturers and encourage product design that minimizes negative environmental and social impacts at every stage of a product's lifecycle.
Using R3's combined experience developing high-diversion franchise agreements, designing state-of-the-art, community-based social marketing and outreach methods, and evaluating the effectivèness of solid waste diversion programs throughout California, R3 will develop a set of recommendations that will focus on ways in which the City can enhance the effectiveness of current programs, as well as develop new programs that will cost effectively increase diversion, if needed. Accordingly, R3 will provide suggested revisions to current strategies, their costs and diversion estimates, and their implementation timelines.
In R3's experience, waste generation sectors most in need of targeted programs to help the community achieve its zero waste goals include the commercial, multi-family, and industrial sectors. These sectors represent the greatest opportunity for additional potential diversion.
Thus, our recommendations will focus on sector-specific diversion improvements.
Task 6.3 Use Data-Driven Approach to Estimate Diversion Potential, Greenhouse Gas Reductions, and Costs
The R3 Project Team will estimate the amount of additional diversion that could be realized by each of the zero waste strategy recommendations. Our data-driven approach to this analysis systematically evaluates the targeted waste generation sectors, waste materials, and rates of effectiveness for each program to present a reasonable estimate of the number of tons that can be diverted from landfill as a result of implementing each recommendation. Drawing on the R3 Project Team's experience, intellectual property, and resources in implementing waste diversion programs across spectrums of the field, we will also estimate the cost for each new and revised zero waste strategy and the cost per ton that each strategy will divert. We will also provide estimates of the associated greenhouse gas emission reductions using the U.S. EPA Waste Reduction Model (WARM).
R3
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Section 5 Task 6.4 Reporting on Zero Waste Update
The R3 Project Team will electronically submit to the City a Draft Zero Waste Plan Update Report detailing the methodology, findings, and recommendations of Task 6 via Draft Project Work Reporting in Task 9. This project component will be project managed by R3, with analysis and Plan report writing by the R3 Project Team. This Draft Report will summarize progress made in implementing the Plan, the City's current trajectory towards reaching its 2030 targets, and the R3 Project Team's recommendations for updating the Zero Waste Plan to cost effectively divert the most tons in support of the City's goal of achieving zero waste.
Task 6 Deliverables
• One (1) measure of Zero Waste Plan progress and program effectiveness using multiple metrics, including:
• Tons disposed and diverted;
• Diversion rate;
• Total pounds per person per day (PPD) and CalRecycle diversion rate equivalent;
• Estimated Greenhouse Gas emission reductions;
• Customer participation;
• AB 341 and 1826 commercial recycling compliance; and/or • Other benchmarks of interest to the City;
• One (1) projection Citywide disposal through 2030 for comparison with the Zero Waste Plan under a current "business as usual" scenario to help determine if the City is on track to meet its goal of 95% diversion, as well as other scenarios showing levels of implementation for recommended strategies;
One (1) round of development of zero waste strategy recommendations that will focus on ways in which the City can enhance the effectiveness of current programs, as well as develop new programs that will cost effectively increase diversion; • One (1) analysis detailing estimated additional diversion and implementation costs, and greenhouse gas emission reductions, resulting from each of the zero waste strategy recommendations; and
• Preparation of analysis, findings, and recommendations for inclusion in Draft and Final Reports.
Task 7 Rate Study and Financial Analysis
Objectives
As Task Lead, R3's primary objective is to determine the sufficiency of the City's current rate structure to sustain the City's Resource Recovery Recycling (RRR) Enterprise Fund, including a projection of how long this may be the case. We will analyze the Fund's financial forecast, revenues, and expenditures for solid waste and recycling operations over a ten-year planning R3 period. The R3 Project Team will assist the City in transitioning from line-item to program- based budgeting and will develop program metrics for financial planning and performance
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division R3 will organize and manage the completion of the Rate Study Model and Financial Analysis Section 5 Task to ensure that stated objectives are met. R3 will incorporate results of the Staffing, Routing and Vehicle Efficiency Analysis, Billing Audit, Technology and Systems Review, and initial Zero Waste Plan Update performed by the R3 Project Team, with particular focus on the Project Work potential cost-savings and other expense and revenues changes related to the above. The final analysis will be supported by our program-based budgeting financial forecast capabilities and Plan metrics for identifying budget improvements.
Additionally, we will identify operational cost-saving or cost-recovery measures, rate-structure provements, and industry comparisons that have the potential to positively impact t ture financial viability of the Fund. These analyses will be accomplished through t development and implementation of a Rate Study Model and will project the impact on rate payers as well as on the Fund's balance and reserves.
Approach
As a municipal enterprise, it is imperative that the City continue to generate sufficient revenues to cover its RRR Enterprise Fund capital and operating expenses and maintain prudent operating reserves. Currently, the Fund self-sustains, earning over 90% of its revenue from the City's approximate 15,800 commercial and residential refuse, recycling, and organics collection accounts. Regulatory and marketplace changes plus new City expenditures threaten to throw the Fund into a negative balance by FY 2021-22, per City projections.
Rate Studies and Financial Analysis go hand-in-hand. R3's approach is to develop an Excel- based Rate Study Model specific to the City that is based on sound and documented operational and financial projections and provides a ten-year planning horizon.
The model will clearly show operating reserve balances and annual revenue surpluses or shortfalls, with a particular eye toward options that would ensure ongoing self-sustainability of the Fund. More detail on the specific steps that will be completed relative to the Rate Study and Financial Analysis is included in this Task.
R3 will analyze the Fund's current ten-year financial forecast and conduct a thorough examination of the Fund's expenditures and revenue streams, consider the impact of the as- yet-unknown RRR mandatory contribution for the City Yards Modernization Plan, and examine he City's vehicle and equipment replacement fund. Additionally, we will analyze the impact f China National Sword policy on the City's recycling revenues, as we as other revenue an expense impacts (such as the loss of SB 90 funding) on the RRR Fund's long-term forecasts.
Finally, findings from other Tasks will be incorporated into the Rate Study Model so that the R3 Project Team can brief the City impacts of those findings with respect to potential revenue enhancements and operational efficacy opportunities.
In approaching this Task, R3 will complete the following analyses and tasks:
• Review current and projected operational requirements; • Document current financial baselines;
• Prepare revenue and expense projections;
• Review the RRR Enterprise Fund and other reserves;
• Identify any potential expenditure savings or cost-recovery opportunities; R3 • Prepare an Excel-based Rate Study Model that will illustrate how each rate scenario may impact the Fund balance and Fund reserves; and will provide examples of what Page 79 of 104 the proposed rate adjustments mean on a customer level.
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Section 5 • Analyze rate structuring options including a minimum of three recommended rate adjustment and rate structure scenarios than can sustain the RRR Division's operational and capital expenditure and revenue requirements over the next ten Project Work
Plan • Conduct a rates and services survey that provides benchmarking information of comparable cities on solid waste rates and rate structures (i.e., bundled, separate, discounted, etc.).
The R3 Project Team will assist the City in building a 10-year program-based budget to account for growth in services, changes in capital needs, and new or modified programs and services.
Metrics previously identified will be assessed as appropriate in the budgeting process to see where modifications or improvements to services may be warranted.
The R3 Project Team will help the City identify data to be collected and/or evaluated in the future to monitor program performance against identified metrics. Program metrics may identify potential inefficiencies in the program (based on comparable programs in other communities) that may be improved, resulting in cost savings or service improvements. We will work with the City to identify these potential cost savings opportunities.
Task 7.1 Review Current and Projected Operational Requirements As part of the development of the Rate Study Model, R3 will work with City staff to document current and projected collection system operational requirements. This will include documenting the current number of accounts and the associated workloads, routes, staffing levels and other operational factors.
Task 7.2 Document Current Financial Baselines
This task involves documenting current financial baselines, which includes applicable revenue and expense line items, fund reserves, capital cost estimates and any other relevant data. It is anticipated that this information will, with any appropriate adjustments, form the "Basis for Projections" over the planning period.
Task 7.3 Prepare Revenue Projections
Revenue projections will be prepared for the planning period. These projections will account for rate-related revenue and non-rate related revenue (interest income, bond proceeds, grants, sale of assets, development fees, recycling revenues etc.), and the impact of growth and any other relevant factors. Rate revenue projections will be based on current rates, which will then be adjusted as part of the rate modeling and analysis performed subsequent sub- tasks below.
Task 7.4 Prepare Expense Projections
Expense Projections
The purpose of this task will be to prepare projections of City staff's expenditures over the planning period. In developing these projections, R3 will coordinate with appropriate City staff, as necessary, to review the historical expenditures and discuss the assumptions, conditions and trends affecting the projections. The format for these projections will correspond with the City's existing accounting records. R3 will assume that a "cash-basis" accounting system is R3 used, whereby expenditures will be included in the fiscal year in which they occur.
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Cost-of-Service Analysis and Program-Based Budgeting Section 5 RRR's Rate Study Model will be designed to provide a Cost-of-Service Analysis that will involve the direct assignment and allocation of revenues and expenses to established collection services, with the intent of balancing revenues and expenses to identify any subsidies that may Project Work exist. The Cost-of-Service Analysis will be conducted using the allocation capabilities of the Plan Rate Study Model. R3 will work with City staff to develop specific allocation factors ano structure the Rate Study Model's allocation capabilities to calculate separate costs for various individual services and lines of business.
To assist the City in transitioning from line-item budgeting to program-based budgeting, the k3 Project Team will provide guidance to the City in helping to align the City's various costs te specific programs. It will be important to ensure that costs are accurately aligned with programs to truly inform the City on specific program costs and to develop and evaluate specific program metrics going forward. To the extent possible, the principal of full-cost ccounting (FCA) will be employed that will consider upfront costs (capital outlays, vehicles quipment), operating costs (salaries, wages, benefits, fuel, supplies, tipping fees, indirec costs such as administrative, legal, and insurance), and backend costs (such as retirement benefits).
Program-based budgeting, where expenses are tracked by line item within each major service category (line of business) provides management with the ability to much more effectively track and analyze costs and identify areas of concern and opportunities for improvement, since it provides for analysis of expenses at the line of business rather than on an overall division basis. The Cost-of-Service analysis that we conduct will provide for the distribution of RRR Division budgeted line-item expenses among each of the lines of business for which RRR Division wishes to track costs (i.e., program/line-of-business-based budgeting), which can serve as the basis for RRR Division's future program-based-budgeting efforts.
In addition to helping the City transition to program-based budgeting, the R3 Project Team will provide guidance to the City on the development of program metrics that can be used for future planning and evaluating program performance through benchmarking of time or against similar cities. Such metrics may include, among others, hourly operating costs, cost per ton collected, and cost per household or business.
Task 7.5 Review Operating Reserve Funds and Uses
R3 will review RRR's Enterprise Fund and reserve accounts to determine if the balance of each reserve is appropriate in regard to the purpose of the reserve. The Rate Study Model that is developed will be constructed so that rates are sufficient to generate the necessary reserve funds over the planning period, and account for the utilization of those reserves as necessary to fund the associated expenses as they are expected to incur.
Task 7.6 Prepare Rate Study Model
The process of designing the Rate Study Model, as well as the subsequent rate analysis, will be a collaborative effort between City staff and R3. From the start of the project, R3 will work with City staff to determine the specific capabilities that are to be included in the Rate Study Model.
Once the structure and components of the Rate Study Model have been established, (e.g., revenue and expense allocations, rates and service levels, vehicle replacement schedules, cost- of-service comparisons, etc.), R3 will work with City staff to populate the Rate Study Model R3 with the most up-to-date financial information and will be informed by the outcomes of other project tasks noted elsewhere in this proposal.
The Rate Study Model will be developed using Excel and will enable City staff to determine the cost of service of the City's collection operations and individual lines of business (e.g., City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Section 5 residential and commercial refuse, recycling, and organics services), and identify savings and cost-recovery opportunities. The Rate Study Model will include a summary of the City's current rate structure, operating expenses, capital costs, revenue streams and reserve funds, and Project Work projected financial performance over the 10-year planning period. R3 will utilize the Rate Study Model as a tool to thoroughly examine RRR's Enterprise Fund's ten-year financial forecast and Plan
its expenditures and revenue streams.
The Rate Study Model will be reviewed with City staff through hands-on training, so that they understand the Model's basic components and how it functions. The Rate Study Model is intended to serve as a tool for the City as part of its ongoing review and analysis of rates, and to that end, the Rate Study Model will provide the ability for annual updates of financial projections and other underlying assumptions.
Factors to be reviewed and evaluated in the development of the Rate Study Model include:
• Current state and ten-year outlook for RRR's Enterprise Fund; • Current operating expenses;
• Projected future operating costs resulting from residential, commercial and/or development growth;
• Projected future operating costs resulting in new, changed and/or expanded collection programs such as commercial recycling and organics services; • Projected future operating costs resulting from marketplace and legislative changes; • Transfer, processing and disposal costs;
• staffing needs;
• Capital needs including trucks, equipment, containers, facilities, and other capital expenses;
• Emergency operating reserve funds;
• The City's current rate structure, revenue streams, and billing program; • Calculation of the cost of service of various City collection services to allow the City to establish cost-of-service rates for individual services, should it wish to do so now, or at some point in the future; and
Other elements as identified by City staff and R3.
Task 7.7 Analyze Rate Structuring Options
R3 will analyze various rate adjustment and rate structure scenarios (minimum of three) and develop specific rate-adjustment recommendations for covering the City's expenditure and revenue requirements over the next ten years. R3 will consider the City's current utility policies, procedures, and regulatory requirements as they pertain to the ten-year financial plan, Rate Study Model, and ten-year rates. As directed by City staff, those scenarios can account for cost-of-revenue neutral service adjustments, combined with overall rate adjustments that are sufficient to fund the City's annual operating costs, and capital operating reserves. Rate adjustment scenarios may include:
R3 • A single rate adjustment that will restructure rates and satisfy the revenue requirement over a set planning period without need for additional adjustment (i.e., no additional annual indexed adjustments);
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division • A single rate adjustment that will restructure rates and satisfy the revenue Section 5 requirement over the set planning period, with additional planned annual CPI-indexed adjustments;
• Consistent annual rate adjustments over a set amount of time to more gradually Project Work introduce the rate structure changes; and/or Plan
• Periodic rate adjustments (e.g., rate adjustments every two or three years).
What's more, R3 will demonstrate each scenario's effect on the RRR Enterprise Fund balance and reserves, as well as on rate payers. That process will be conducted collaboratively with City staff, providing them with hands-on training for their ongoing use of the Rate Study Model.
Task 7.8 Conduct Rates and Services Survey
Objectives
To assist the City in placing current and potential services in the context of neighboring communities, R3 will conduct a survey of comparable service and rates for at least five additional municipally operated solid waste operations to establish service/rate benchmarks.
The survey will include a review of cans or carts, bin and drop boxes for residential, multi-family and commercial customers.
Approach
The survey will include an analysis of how the jurisdictions are setting rates and allocating rey star adrey esses base on Corpasion 28. The suate, wil as conclude othere, special pick-up charges; disposal fees; governmental and regulatory fees; and other services (such as bus stop waste receptacle servicing) included in the rates.
R3 regularly works to review rates and services for. municipal operations, and also regularly conducts surveys of rates and services throughout the State. As such, we are well positioned to provide a cost-effective survey for the City. R3 has a list of the municipal solid waste operations in the State, and prior to conducting this task, we suggest that the R3 Project Team and the City establish which specific cities' rates and services are most appropriate for comparison. Careful selection of comparable agencies is important - variances in rate setting methodology, potential subsidies between residential and commercial sectors, local interpretations of Proposition 218, post-collection agreement terms, disposal and processing fees, government and regulatory fees, provision of services to schools, distribution of container sizes in the community, and many other factors can make a seemingly "apples-to-apples" comparison very complex, with results that may not be representative for the purposes of this comparison and benchmarking exercise.
It is important to note that the survey will include more than a simple "rate comparison." It will also include disposal and organics processing fees, franchise fees, AB 939 Fees, Vehicle Impact Fees, services provided at "no cost" to the communities, (e.g., street sweeping, collection from bus stops, public schools, public buildings and facilities, etc.), diversion requirements, frequency of recycling and organic collection, methods for collecting bulky waste, fuel types used for collection vehicles, and provisions for dedicated "sustainability coordinators."
R3
In order to select appropriate comparisons prior to conducting the survey, R3 will prepare a list of known municipal solid waste operations along with currently retained information about
the rates, services, location and other conditions that will facilitate selection of appropriate City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Section 5 comparable communities. We will provide this information to City staff and then solicit the City's input on the top 7-10 communities for inclusion in the survey.
R3 will then communicate with staff at the selected cities to gather information including:
Project Work
Community population, and total number of accounts for residential, commercial and Plan industrial customers;
Number of accounts at each service level option for residential, commercial and industrial customers (which is critical to an "apples-to-apples" comparison and not generally evaluated by others who conduct such surveys); • Services rates for container sizes, waste streams, and other services; Detailed list of services that are provided via any "bundled" service rates, and the specific service offerings for those services (eg. bulky item pickups, extra service charges, street sweeping services, City services, services to schools, HHW service, etc.) • Types, sizes and frequency of collection of containers provided for residential, commercial and industrial customers;
• Specific information regarding how rates are allocated with respect to the requirements of Proposition 218;
• Specific information regarding post-collection costs including disposal, organics processing, and recyclables processing fees, as applicable; • Governmental and regulatory fess, as applicable; and
• Other information discussed and confirmed in consultation between R3 and the City.
R3 will seek this information voluntarily from the 7-10 communities selected in consultation with the City via phone, email, and written request. If we are unable to acquire complete survey information for five (5) comparable communities based on the voluntary request we may suggest that the City issue a formal Public Records Act request for the necessary information; however, we would like to avoid that being necessary because of the time, effort, and relationship impacts that can arise from making such requests.
Task 7 Deliverables
• One (1) detailed review of the City's:
• Historical, current and projected revenues and expenses; • Anticipated conditions that will affect projected revenues and expenses; • Operating and capital reserve funds;
• Current rate structure and desired modifications; and • Findings and recommendations with cost-efficiencies and other revenue and expense changes resulting from other project tasks.
• One (1) Excel-based financial planning and rate adjustment model (Rate Study Model) that the City can use to project revenues and expenses, and evaluate current and future rate adjustment options, including cost-of-service rate options, over an R3 extended period;
• Incorporation of findings and recommendations from other Tasks into the Rate Study
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division • A minimum of three (3) rate-adjustment optional scenarios projected over a 10-year Section 5 planning period;
• One (1) set of recommended rate adjustments, demonstrating impacts on Fund balance and rate payers; Project Work
• One (1) rate and service survey Benchmarking survey results on solid waste rates and Plan rate structures for a minimum of five (5) comparable communities, including. an analysis of how other municipal enterprise funds have managed the financial impact from Prop 218; and
Preparation of analysis, findings, and recommendations for inclusion in Draft and Final Reports.
Task 8 Community Engagement on Zero Waste Strategic Operations Plan Review & Rate Study
Task 8.1 Community Engagement Plan and Outreach Content Objective
Draft a Community Engagement Plan and content for outreach materials for both the Zero Waste Plan and the Rate Study Model, make revisions based on comments and suggestions from City staff, and then finalize the Community Engagement Plan for implementation.
Methodology
BETTE
We generally envision that draft content for outreach materials (including content for newspaper ad(s), flier(s), webpage(s), social media posts, and presentations announcements, notices, and/or presentations) will be developed during each of the subtasks below, at the request of and in consultation with City staff.
The R3 Project Team will lead community engagement efforts, with R3 managing the project elements and deliverables. The City will be responsible for scheduling and securing City venues and providing refreshments for all community engagement events.
Task 8.2 Public Workshops, Neighborhood and Community Meetings & Online Survey
Objectives R3
Conduct innovative community engagement within the City to provide residents and businesses with the opportunity to learn about and offer meaningful feedback on the draft Zero Waste Plan Update and Rate Study Model. Work with City staff to design and implement Page 85 of 104 City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Section 5 an outreach strategy and provide content for outreach and other materials for City use in the future.
Approach
Project Work
Plan The R3 Project Team will, in consultation and with the participation of the City, schedule, announce, program, and conduct two (2) Public Workshops (in facilities provided by the City), tentatively in late February or March 2019. to engage interested stakeholders in the Zero Waste Plan Update and Rate Study Model. The project team will review the proposed presentation with City staff prior to its finalization. These events will be structured as public information forums during which City and R3 Project Team staff will provide summaries of the Draft Zero Waste Plan Update and Draft Rate Study Model via handouts and presentations anc invite public participation and feedback on the recommended rate structure and zero waste strategies, while also highlighting progress towards the current 2030 zero waste targets.
Based on our experience with public workshops such as these, we suggest that the two (2) Public Workshops be inclusive of both residential and commercial customers (as well as HOAs, environmental organizations, downtown businesses, hotel groups, and/or other focused stakeholders that the City feels is appropriate) and scheduled on distinctly different days and times to allow for diverse participation. Every community is unique and City staff have a deep understanding of their community and its values. To ensure that the Zero Waste Plan Update and Rate Study Model are reflective of the goals and vision of this community, it is important to involve the whole community in the development of the Plan.
In addition to and conjunction with the Public Workshops, the R3 Project Team will conduct up to eight (8) individual meetings with Council members, neighborhood associations, HOAs, environmental organizations, business associations, faith-based organizations, schools or other organizations identified and agreed to by R3 and the City in developing Task 8.1. This expands the range and type of outreach to the community on the Zero Waste Plan Update and the Rate Study.
In addition, the R3 Project Team proposes to develop and host a brief, online community survey to engage stakeholders who may prefer to give their feedback online. R3 has found that the use of online surveys can generate substantial public participation in the planning process and recommends providing this alternative means of inviting public input. The R3 Project Team will work with the City to create a draft survey. Following the City's review and feedback we will finalize the survey and create an active online link easily utilized by participants. It will be the responsibility of the City to distribute this survey link to the community and to encourage participation. We will include draft language in the form of an email that can be used by the City for promotion of the availability of this online survey. We suggest that the survey link be included on the City's website, be distributed to City employees and other contact lists, be included on any bill inserts or other material that will be immediately distributed to City residents and the business community and marketed at any events or other opportunities that are available at the time of survey creation. We will leave the survey open for approximately four (4) weeks to maximize the potential for receiving a high number of responses.
R3 will synthesize and summarize the findings of the two Public Meetings and the online survey in an electronic memorandum to the City.
R3 Task 8 Deliverables
• One (1) draft community engagement plan for City approval with two (2) weeks for
• One (1) final community engagement plan for R3 Project Team implementation; City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division • One (1) schedule for development and City review of draft content for outreach Section 5 materials, including a one-week review time for environmental staff and then a minimum of two (2) weeks preparation time for City marketing staff; • Up to eight (8) individual meetings with Council members, neighborhood associations, Project Work HOAs, environmental organizations, business associations, faith-based organizations, Plan schools or other organizations identified and agreed to by R3 and the City; • Facilitation of two (2) Public Workshops to gather public input on the draft Zero Waste Plan Update and Rate Study Model, including development of presentation materials; - Facilitation of one (1) online community survey via R3's Survey Monkey account; • Synthesize and document comments, questions, and suggestions offered by the community via the Public Workshops and survey to be included in the Zero Waste Plan Update and Rate Study Model draft and final reports; and Preparation of analysis, findings, and recommendations for inclusion in Draft and Final Reports.
Note: The R3 Project Team assumes that the City will provide the following in support of this task:
• Promotion of the meetings and survey via the City's website, email lists, newsletters, and other City promotional resources (R3 does not propose to conduct promotion); • Arrange for sufficient City staff resources at both Public Meetings to address stakeholder questions;
• Arrange for design, printing, and distribution of announcements for the Public Meetings;
• Provision of a location for the Public Meetings; and
Provision of refreshments as desired for the Public Meetings.
Task 9 Draft Reporting and Revisions
Objectives
R3 Project Team will produce a Draft Report featuring consolidated findings for all Tasks. The Project Team will then meet with City staff to review the Draft Report, and then will conduct up to two (2) rounds of revisions based on consolidated written comments from the City, in preparation for presentation of findings and recommendations to the City Council via Task 10.
Approach
R3 will consolidate outcomes from all Tasks into a detailed electronic Draft Report. The Draft Report will include contributions from R3 Project Team member firms, and will feature an introduction and background, plus a narrative explaining the scope, methodology, findings, and recommendations, plus detailed operational metrics and costs. The Draft Report will be provided to City staff for review, comment, clarification, and subsequent discussion by approximately mid-March 2019.
Following delivery of the Draft Report, the R3 Project Team will attend a Draft Report Review R3 Meeting to present findings to - and solicit feedback from - City staff on the Draft Report. R3 Project Team members will come fully prepared to discuss, clarify, answer questions, and
further refine the content of the report, for the purposes of addressing written comments from the City. To ensure that this Reporting Review Meeting is completed successfully and on City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Section 5 schedule, City staff will provide meeting space and necessary accommodations. City staff are requested to forward consolidated written comments on the Draft Report to R3 in an electronic memorandum within two (2) weeks of the Reporting Review Meeting.
Project Work
Task 9 Deliverables
Plan
• One (1) electronic Draft Report for City review and comment; • One (1) reporting review meeting with City staff;
• Two (2) weeks for City staff to provide consolidated written comments on the Draft Report;
• One (1) electronic Final Draft Report as the basis for Council presentation in Task 10, below.
Task 10 Council Presentation
Objectives
Produce and deliver a PowerPoint Presentation to the City detailing results of project tasks conducted to date.
Approach
The R3 Project Team will prepare a Draft and Final PowerPoint Presentation to convey the findings and recommendations detailed in the Final Draft Report. R3 will produce the Presentation, project manage this Task, and coordinate logistics with City staff. City staff is expected to provide R3 with written comments on the draft presentation, and review and approve the final presentation.
R3 will lead the Presentation to the City Council and will assist City staff as needed with addressing : any questions and concerns. The presentation will be structured as an informational item during which the R3 Project Team will provide handouts and a brief overview of the projects to date, including the key components of the Draft Rate Study and Draft Zero Waste Plan Updates.
The R3 Project Team has planned this presentation to take place during a City Council meeting on May 21, 2019, to roughly coincide with when the City's Water Resources Department is scheduled to present their draft 2020-24 Water/Wastewater rates & Capital Facilities fees tr the Council. City staff will be asked to provide the date and time of the selected City Council meeting, coordinate the delivery of the Final Presentation to Council, and provide necessary accommodations and resources.
Task 10 Deliverables
• One (1) Draft PowerPoint Presentation for City staff review and comment; One (1) week for City review and consolidated written comments; One (1) Final PowerPoint Presentation addressing City comments; and • One (1) live presentation to City Council.
R3
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Task 11 Council Presentation Review & Meeting with Staff Section 5 Objectives
The R3 Project Team and City staff will review the City Council's feedback on the Task 10 Project Work presentation and map out the final project needs and path to completion of this engagement. Plan Approach
This meeting provides another interim project review opportunity for City staff and the R3 Project Team. The focus will be on examining the City Council's feedback on the Draft Report and assessing next steps towards finalization of the Report.
R3 will develop the agenda, issue the request for information, organize and run the meeting in conjunction with City staff, and organize City staff interviews. R3 Project Team key staff will contribute information request items, participate in the meeting, and conduct the interview vith City staff. Attendees from the City should include key staff knowledgeable of aspects o billing, staffing, routing, fleet, rates, finances, technology and systems, and zero waste, at the City's discretion.
To ensure that this meeting is completed successfully and on schedule, City staff is requested to provide meeting space and necessary accommodations.
Task 11 Deliverables
• One (1) final consolidated, detailed RFI and documentation submitted to City staff via email one week prior to the meeting;
• Review of received information, with follow-up as needed.
Task 12 Incorporate Changes to Rate Study and Financial Analysis Resulting from staff and Council Presentations
Objective
Address comments raised during Public Workshops and the City Council presentation by providing written responses to those comments and revisions to the Final Draft Report.
Approach
As input is received during the City staff and City Council presentations of the Final Draft Report, R3 will document comments in the form of a matrix. R3 will categorize and discuss the comments with City staff and determine how to implement revisions to the Rate Study Model that directly address the comments. If it is not feasible to address certain comments via revisions to the Final Draft Rate Study Model, it will be so indicated in the Final Report.
Task 12 Deliverables
• One (1) matrix of comments received during City Council presentation, including responses to those comments; and
• One (1) round of revisions to Final Draft Report for final City staff and City Council consideration. R3
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Section 5 Task 13 Final Community Meeting on Final Zero Waste Strategic Operations Plan Updates and Rate Study
Project Work Objective
Plan Provide the final community outreach meeting where stakeholders will have the opportunity to provide input to the City regarding the City's plans for implementing updated zero waste goals and new solid waste collection rates.
Approach
As Lead and Project Manager, R3 will, in consultation and with the participation of the City schedule, announce, program, and conduct two (2) final community outreach meetings (ir facilities provided by the City), tentatively in late May and/or early June 2019, to engage interested stakeholders in one last opportunity to provide input on the final drafts of the Zero Waste Plan Update and Rate Study Model. The project team will review the proposed presentation with City staff prior to its finalization. These events will be structured as public information forums during which City and R3 Project Team staff will provide summaries of the final draft Zero Waste Plan Update and final draft Rate Study Model via handouts and presentations and invite public participation and feedback on the recommended rate structure and zero waste strategies, while also highlighting progress towards the current 2030 zero waste targets.
Task 13 Deliverables
• Facilitation of two (2) final community outreach meetings to gather public input on the Final Drafts of the Zero Waste Plan Update and Rate Study Model, including development of presentation materials;
• One (1) synthesis and documentation of public comments, questions, and suggestions offered by the community via the meeting to be included in the Final Zero Waste Plan Update and Rate Study Model reports; and
• Provide one (1) electronic memorandum summarizing the results of the stakeholder engagement event, with a focus on how the Final Zero Waste Plan Update and Rate Study Model reports address the community input.
Note: The R3 Project Team assumes that the City will provide the following in support of this task:
Promotion of the meeting and survey via the City's website, email lists, newsletters, and other City promotional resources (the R3 Project Team does not propose to conduct promotion);
• Arrange for sufficient City staff resources at the meeting to address stakeholder questions;
• Arrange for design, printing, and distribution of announcements for the meeting; Provision of a location for the community meeting; and
• Provision of refreshments for the community meeting.
R3
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Task 14 Final Report Section 5
Objective
Address comments raised during the Community Meeting on Zero Waste Plan Update and Rate Project Work Study Model by providing written responses to those comments, revisions to the Final Draft Plan Report, and a Final Report, in preparation for presentation to the City Council meeting on or around August 27, 2019.
Approach
As input is received during the Final Community Meeting on Zero Waste Plan Update and the Rate Study Model, R3 will document comments in the form of a matrix. The R3 Project Team will categorize and discuss the comments with City staff and determine how to implement revisions to the Final Report that directly address the comments. If it is not feasible to address certain comments via revisions to the Final Draft Report, it will be so indicated in the Final Report.
Task 14 Deliverables
• One (1) Matrix of comments received during staff and City Council presentations, including responses to those comments;
One (1) electronic Final Draft Report for final City staff consideration; Two (2) weeks for City staff to provide consolidated written comments on the Final Draft Report; and
• One (1) revised electronic Final Draft Report for City Council consideration.
Task 15 Council Presentation on Final Rate Study and Zero Waste Strategic Operations Plan Updates
Objective
Present the Final Rate Study and the Zero Waste Plan Update to the City Council.
Approach
R3 will work with City staff to draft the study session staff report and the PowerPoint presentation for the City Council meeting. R3 has planned this event to take place during the Council meeting on or about August 27, 2019, to coincide with the City's Water Resources Department's scheduled presentation of its Water/Wastewater Final Rate Study and Proposition 218 Notice. The City is expected to provide R3 with the date and time of the selected City Council meeting and make necessary accommodations.
The Council presentation will be structured as an informational item during which R3 Project Team staff will provide handouts and a brief overview of the complete projects to date, including the key components of the Final Rate Study Model and Zero Waste Plan Updates as well as the outcomes of the community engagement process.
The R3 Project Team will make the presentation to the City Council recommending adoption R3 of the updated Zero Waste Plan and new Rate Structure.
Task 15 Deliverables Page 91 of 104
• One (1) study session staff report in preparation for the City Council presentation; and City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Section 5 • One (1) PowerPoint Presentation of the Final Rate Study findings and Zero Waste Plan Updates to City Council.
Task 16 Proposition 218 Notice to Customers
Project Work
Plan Objectives
roport the 2itl compliance with the soil restenent to notify is customers, through a Approach
The R3 Project Team will support City staff in their preparation of draft and final English and Spanish versions of the Public Hearing Notice, in compliance with the requirements of Proposition 218, reflecting the City's proposed rate adjustments, for review and approval by the City. R3 will help to ensure the accuracy of required rate tables and descriptions. The final Rate Study will serve as the administrative record for compliance with Proposition 218. The format of the Notice can be a simple "post card" that details the percentage increase and notice for the public hearing, or a more comprehensive print piece that features a full listing of the proposed rates.
The R3 Project Team project budget assumes that the City will be responsible for producing and mailing the Proposition 218 Notice, protest ballots, and Notice of Public Hearing to property owners.
R3 recommends that the City mail the notices along with customer bills as part of a billing cycle to minimize mailing costs. The Proposition 218 Notice is scheduled to mail on or around the week of September 3, 2019, or approximately one week after the Task 15 Council presentation.
Task 16 Deliverables
• Support to City staff for development of the Proposition 218 Notice.
Task 17 Council Public Hearing for Rate Adoption and Adoption of Zero Waste Strategic Operations Plan
Objective
The R3 Project Team will recommend City Council adoption of the updated Zero Waste Plan and new Rate Structure at a Public Hearing on or around October 22, 2019.
Approach
R3 will lead the Presentation at the City Council Public Hearing recommending adoption of the Final Zero Waste Plan and Rate Structure and will assist City staff as needed with addressing any questions and concerns. The Presentation will provide a brief overview of the complete projects to date.
R3 has planned this Presentation to take place during a City Council meeting on or about October 22, 2019, to coincide with when the City's Water Resources Department is scheduled R3 to present their draft 2020-24 Water/Wastewater rates & Capital Facilities fees to the Council.
City staff will be asked to provide the date and time of the selected City Council meeting, coordinate the delivery of the Final Presentation to Council, and provide necessary
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Task 17 Deliverable Section 5
• One (1) Presentation to City Council at Public Hearing for Adoption of Rate Structure and updated Zero Waste Plan.
Project Work
Optional Task A Operations Modeling Plan
At the City's option (not included in the base Project Work Plan and at an additional cost as shown in Section 6), the R3 Project Team will develop a Collections System Operations Model for the City. If the City directs the R3 Project Team to conduct this Optional Task A and wishes for the results to be available along the same schedule as other Tasks, the City must inform the R3 Project Team of its intent to engage this Task prior to the start of December 2018. If direction to conduct this Task occurs after that time, the results of this Task may not be available on the same schedule as the primary project Tasks listed earlier in this Project Work Plan.
The Collection Systems Operations Model will include evaluating field data and defining operating assumptions and project goals. Our understanding of existing programs in communities of similar sizes allows them to conduct a realistic appraisal of the current system.
The model will be created using available geographic information system (GIS) data of the City of Santa Monica street network, the collection services provided, and the multitude of service locations (both residential and commercial). Data will be gathered to populate the model, including:
• GIS shape files from the City's Map and Geographic Information System database; • Street network and street characteristics (e.g. one-way, speed limits); • Number, location, and type of stops (residential, commercial, refuse, recycling, and organics);
• Time-per-stop;
• Number, type and capacity of collection trucks;
• Time and distance to and from truck yard and routes;
• Time and distance to and from disposal/recycling drop-off locations and routes or truck yard;
• Average scale weight per truck for each operation;
• Weight per pick-up assumptions; and
• Truck operating costs.
Using data collected, The R3 Project Team will create the collections system operations model for the City. The model will be developed utilizing the ArcGIS Network Analyst extension. This tool will be used to optimize the collection system based on factors including time and cost.
For the purpose of this proposal, we have assumed separate models for the 16 front loader routes, 7 bin routes, and 13 side-loader routes. The R3 Project Team has not assumed to model the litter, pressure washer, bulky items pickup, sweeper, night, special event, or scout routes; these items can be included, at the City's request.
Examples of data entered into the ArcGIS Network Analyst is displayed in the figure below, R3 however, the specific fields and settings will be customized to the City. Features such as truck capacity, time-per-stop, and weight collected per stop will be refined to create models that represent the specific characteristics and constraints for each collection system. The model Page 93 of 104 will incorporate City policies including collection operating hours, break and lunch policies, and City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Section 5 any proposed or recommended changes to the fleet. Based on the relatively new age of the City's collection fleet, the R3 Project Team would likely be using the capabilities and constraints of the existing fleet of vehicles and determining changes to maximize the fleet's production Project Work and efficiency.
Plan The model will analyze the system of pickups and determine the most efficient way to perform collection within the given operating hours with the truck fleet. The model minimizes the overall operating costs for the fleet while considering time and distance constraints. Model outputs will also be custom tailored to the City, but may include:
• Line paths representing routes;
• Order of collection;
• Turn-by-turn directions;
• Time to collect;
• Time to route and time to/from tipping locations;
• Travel miles;
• Overall travel time; and
• Cost per route.
The data evaluation may identify potential changes to the system that can maximize production and reduce operational costs. Such changes may include reduced truck operating hours, reduced fuel costs, reduced number of routes, and reduced labor costs. Based on our understanding of the relatively new age of the collection fleet, we do not anticipate changes to the collection vehicles would be favorable or cost effective. * Properties • Routes - Zone 4
ayer Properties Attribute Vakse
Objectib
Ganeral Layers Seuros Anniyale Sellinge Advanoed Salinge Albibule Parameters Nebrod Locationa Name Item4
-Setlings -Restrictions
Description «Nul>
Time Attribute: BOneway Star Depotliame <ul>
Distance Attirbute: Length (les) EndDepotName <Null>
StarDepotServiceTime «Null>
Default Dete:
EndDepotServiceTime <Null>
6 Day of Week:
EerliestStartTime 8:00:00 AM
• Specific Date: (10/2015
LatestStartTime 10:00:00 AM
Capecity Count: ArriveDepartDelay <Null>
Capacities
Time Field Units:
FixedCost «Null>
Directions
Distance Field Units: Miles CostPerunitTime
Distance Unita:
Allowed Only at Intersect: Miles CostPerlhitDistance <NuI> U-Tums at Jundions:
OvertimeStartTime <Nul>
Output Shipe Type: True Shape with Messures * F Use Time Attribute:
CostPerUnitOvertine <Nu>
MaxOrderCount 30
• Ignore Inwald Order Locallons Г Open Dinections window automatically MaxTotalTine <Nu> MaxTotalTravelTime <hul>
about the maticle routing restle. arabis lover MaxTotalDistance SpecialtyNames «Nul>
AssignmentRule Indude
ViolatedConstraints «Null>
OK Canoe
OrderCount «Hull>
TotalCost «Null>
R3 RegularTimeCost «Null>
OvertimeCost «Null>
DistanceCost
OK Cancel
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Optional Task A Deliverables Section 5
• Collection of data request information for Operations Modeling; and • One (1) complete model of operational efficiencies. Project Work Optional Task B Conduct Physical Billing Audit Plan
Objectives
At the City's option (not included in the base Project Work Plan and at an additional cost as shown in Section 6), the R3 Project Team will compile and further analyze the audit data and include feedback from the City's review of the Report in preparing our findings and recommendations. If the City directs the R3 Project Team to conduct this Optional Task B and wishes for the results to be available along the same schedule as other Tasks, the City must inform the R3 Project Team of its intent to engage this Task prior to the start of December 2018. If direction to conduct this Task occurs after that time, the results of this Task may not be available on the same schedule as the primary project Tasks listed earlier in this Project Work Plan.
To test the accuracy of the customer billing system, the R3 Project Team will perform field testing for sample routes for both residential and commercial customers. The City should note that the cost for Optional Task B will vary from the amount stated in the Section 6 Cost Proposal if the City is not able to provide sufficient route auditor support and vehicles to facilitate completion of route auditing for seven (7) equivalent routes within the one week the R3 Project Team has budgeted and scheduled for this work. Actual costs may be greater or less than the amount shown in Section 6 depending on the number of route auditors and vehicles that can be provided in a given week, with the cost increasing if the City commits fewer route auditor support staff over the period of one week.
Should the City elect to conduct this Task, the City and the R3 Project Team will need to discuss and revise the scope and cost of this Task to be in alignment with the staffing and vehicle resources the City can reasonably provide.
Approach
The R3 Project Team will prepare the analysis of the audit findings for inclusion in the Draft Report (Task 9) for review by the City. The format of the reporting will enable the City to calculate the impact of decision(s) on how to reconcile future discrepancies. For example, for accounts that are over-or under-billed, a decision will need to be made regarding how to notify customers of the discrepancies, and how to handle the resolution of back charges and credits.
If the City maintains a subscription file (a form that documents the level of service for which customers enrolled), it can be used to determine which level of service to accept as legitimate and to adjust charges to match that agreement. The R3 Project Team will assist the City in making this decision and will calculate the potential impact on revenue. Additionally, we will conduct a field audit of residential and commercial collection services route drivers to document the level of service as compared to the City's customers' subscription and billing level(s) of service.
Review Data and Produce Field Auditing Forms
The R3 Project Team will analyze the documentation of service levels and billing derived from R3 reviewing the City's NorthStar billing system data and the data from the field audit of both residential and commercial customers. All discrepancies in billing service levels, routing service Page 95 of 104 levels, and actual or physical service levels will be identified City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Section 5 This analysis will provide documentation of over- and under- service charges and current customer account service-level data.
The R3 Project Team will use the customer billing and route data obtained from staff to prepare Project Work the field forms necessary to conduct field auditing. We will review and analyze the listing of Plan residential and commercial customer accounts, addresses, service levels, service days and fees, and pertinent route information. We will then prepare field worksheets by route, by day and address, listing customer account information and service levels for both residential and commercial accounts. The field audit is formatted to enable the field auditor to seamlessly document the actual observed service levels of both residential and commercial customers while conducting the field auditing.
Field Auditing of Residential and Commercial Customers
We recommend conducting this physical audit after the results of the billing data audit. Our experience has shown that there are three key areas that contribute to errors in customer billing: i) errors in codes used in billing data, ii) errors in the operations routing data, and iii) driver error in servicing accounts (e.g., collecting too many carts or bins placed out for service).
The results from the billing data audit will identify systemic issues in the billing system that may require further consideration and perhaps a physical billing audit to reconcile completely.
We will review and analyze the listing of residential and commercial customer accounts, addresses, service levels, service days and fees, and pertinent route information. The R3 Project Team will then prepare field worksheets by route, by day and address, listing customer account information and service levels for both residential and commercial accounts.
The R3 Project Team recommends that the City conduct a field audit of all customers every one-two years, per industry best practice standards. We are prepared to complete such an extensive audit and will be pleased to provide a corresponding budget during contract negotiations, should the City so desire.
For the purposes of this proposal, the R3 Project Team is recommending a sampling 16%, the equivalent of seven of the City's routes to garner statistically significant, projectible results.
Our field services auditors will accompany both residential and commercial collection services route drivers in their trucks to document the level of service as compared to their subscribed to and billed level(s) of service. As such, the R3 Team will audit a residential and commercial accounts sample over a one-week period as follows:
• Audit approximately seven (7) equivalent routes of commercial and residential accounts for seven total equivalent routes;
• Route auditors to ride-along in City trucks (or in rental cars at extra cost not included in proposal); and
• Include one (1) R3 Project Team auditor per route (assumes City will provide one additional auditor from City staff).
Optional Task B Deliverables
• One (1) round of field auditing of residential and commercial customers for approximately seven (7) of the City's collection routes, including R3 Project Team R3 supervision and organization of the billing audits;
• One (1) R3 Project team auditor per route with City providing one additional auditor per route over the period of one week;
Identification and analysis of billing vs. routing discrepancies; City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division • Extrapolation of findings to all City accounts based on sampling conducted; and Section 5 • Preparation of analysis, findings, and recommendations for inclusion in Draft and Final Reports.
Project Work
Project Schedule Plan
R3 has prepared to the following schedule demonstrating the timeline for completion of all Tasks proposed via this Project Work Plan. This schedule meets the City's schedule expectations for the Rate Study and will enable the City to conduct Proposition 218 noticing in keeping with the Water/Wastewater rate hearing schedule.
This schedule assumes that the City will provide authorization to proceed by the end of November 2018. This schedule also assumes that all required information, City review periods, meetings, staff interviews, and access to operations for observation and auditing purposes will occur swiftly and in keeping with the timelines stated in this proposal. Delays to any of the above may require changes to this schedule and could result in the Rate Study not moving forward on the timeline desired by the City.
Table 5-1
Proposed Project Schedule
Project Task Areas Start Week End Week
Project Initiation and Management 11/27/2018 12/4/2018
Staff Meetings and Interviews 11/27/2018 12/4/2018
Staffing, Routing and Vehicle Efficiency Analysis 11/27/2018 3/5/2019 Billing Audit 11/27/2018 3/5/2019
Technology and Systems Review 11/27/2018 3/5/2019
Zero Waste Strategic Operations Plan Review and Update 11/27/2018 3/5/2019 Rate Study and Financial Analysis 11/27/2018 3/26/2019
Community Engagement Meetings 2/26/2019 3/26/2019
Draft Report Development 3/5/2019 3/26/2019
Presentation of Draft Rate Study to Council 5/21/2019
Final Draft Report Development 5/21/2019 6/11/2019
Community Engagement Meetings 5/21/2019 6/11/2019
Completion of Final Report 6/11/2019 7/2/2019
Presentation of Final Rate Study to Council 8/27/2019
R3
Proposition 218 Notice to Customers Week of 9/3/2019
Council Rate Adoption Hearing 10/22/2019 Page 97 of 104 Exhibit B
Budget
The total not-to exceed cost for this project for the scope of services stated in Exhibit A is $352,075. This includes a base cost of $284,640 for 1,430 billable hours to complete Tasks and Deliverables 1 through 17, as stated in Exhibit A, plus an additional cost of $67,435 for 698 billable hours to complete Optional Task A and Optional Task B, as stated in Exhibit A, should the City desire to engage R3 CONSULTING GROUP, INC. to conduct those optional tasks. The City has the sole discretion to determine if any part of Optional Task A and Optional Task B, or if any additional work beyond what is covered in the base cost of $284,640, is necessary.
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Section 6
Cost Proposal
We propose to complete the Project Scope of Work on a time-and-materials basis for a not- Cost Proposal to-exceed budget by task totaling $284,640, including travel expenses. Table 6-1 below demonstrates the proposed cost by task, phase, and overall for the project. R3 can provide additional details upon request. A schedule of billing rates for R3 Project Team members is on the following page.
The R3 Project Team has endeavored to provide a proposal meeting all the City's needs for this project while including cost-saving measures where possible.
Table 6-1
Cost Proposal
Average Percentage
Original Revised Total of Total
Project Task Areas Revised Cost Hours Blended
Proposal Hours
Cost/Hour*
Project Initiation and Management $ 6,075 $ 5,985 27 $ 222 2% Staff Meetings and Interviews $ 20,350 $ 20,330 96 $ 212 7% Staffing, Routing and Vehicle Efficiency Analysis $ 88,975 IS 66,600 304 $ 219 21% Billing Audit $ 58,400 $ 13,270 66 $ 201 5%
Technology and Systems Review 21,700 $ 17,120 76 225 5% Zero Waste Strategic Operations Plan Review and Update $ 28,325 $ 28,300 165 $ 172 12% Rate Study and Financial Analysis 68,000 $ 67,975 348 195 24% Community Engagement $ 14,425 $ 27,800 160 174 11%
Draft and Final Report Development 21,575 21,475 108 199 8% Presentations to City Council $ 21,150 15,785 80 197 6% Total $ 348,975$ 284,640 1430 199 100%
Optional Task A: Route Efficiency Modeling $ 22,375 $ 22,375 160 $ 140 Optional Task B: Field Route Audits 45,060 538 I$ 84
Note on Optional Task B: Assumes 1 R3 Team Field Auditor and 1 City Driver in City Vehicle. Auditor costs can be reduced if City provides both Field Auditors, though supervisory costs may increase * Travel expenses are included in the Blended Cost/Hour.
R3
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Section 6 Billing Rates
In Table 6-2 below, we have provided the hourly billing rates for the R3 Project Team. These Cost Proposal hourly fees include all fringe benefits, indirect costs and profit. R3 is not marking up subconsultant fees. The percentage of scope completed by individuals by each of the following classifications is also shown.
Table 6-2
Billing Rates
Hourly Rate Percentage of Proposed
Category Work Time by Classification
R3 Consulting Group
Principal / Project Director $205 per hour 22%
Senior Project Manager $185 per hour
Project Manager $160 per hour 8%
Senior Project Analyst $145 per hour
Project Analyst $135 per hour
Associate Analyst $120 per hour
Administrative Support $100 per hour
Sloan Vazquez McAfee
Principal $245 per hour 13%
Senior Associate $195 per hour 11%
Associate / Field Auditor $165 per hour 28%
Administration $65 per hour
HDR
Principal $300 per hour 3%
Senior Project Analyst $180 per hour 4%
Project Analyst $140 per hour -
Abbe & Associates
R3 Principal $150 per hour 7%
City of Santa Monica, CA
Proposal for Operational Analysis and Rate Study for Resource Recovery and Recycling Division Table 6-3 Section 6
Reimbursable Costs (Included in Hourly Rates)
Category Cost
Cost Proposal
Lodging and meals Direct cost
Travel - Private or company car $0.535 per mile or rental cost Travel - Other Direct cost
Delivery and other expenses Direct cost
Payments
Unless otherwise agreed in writing, fees will be billed monthly at the first of each month for the preceding month and will be payable within 30 days of the date of the invoice.
R3
Exhibit C
Professional Services Agreement Insurance Requirements
Professional Liability Insurance Required
Consultant shall procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, employees or subcontractors.
Minimum Scope and Limits of Insurance
Coverage shall be at least as broad as:
1. Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an "occurrence" basis, including products and completed operations, property damage, bodily injury and personal and advertising injury, with limits of no less than $1,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (Insurance Services Office Form CG 25 04) or the general aggregate limit shall be twice the required occurrence limit.
2. Automobile Liability: Insurance Services Office Form CA 00 01 covering Code 1 (any auto), or if Consultant has no owned autos, Code 8 (hired) and Code 9 (non-owned), with limits of no less than $1,000,000 per accident for bodily injury and property damage.
3. Workers' Compensation: Workers' Compensation insurance as required by the State of California, with Statutory Limits and Employers' Liability Insurance with limits of no less than $1,000,000 per accident for bodily injury or disease (see footnote #1).
4. Professional Liability: Insurance appropriate to the Consultant's profession with limits of no less than $1,000,000 per occurrence or claim/$2,000,000 in the annual aggregate.
If the Consultant maintains broader coverage or higher limits than the minimums shown above, the City of Santa Monica requires and shall be entitled to any broader coverage and higher limits maintained by the Contractor. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City of Santa Monica.
Other Insurance Provisions
1. The insurance policies are to contain, or be endorsed to contain, the following provisions:
a. Additional Insured Status: The City of Santa Monica, its officers, officials, employees and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of Consultant including materials, parts, or equipment furnished in connection with such work or operations. CGL coverage can be provided in the form of an endorsement to the Consultant's insurance (at least as broad as Insurance Services Office Form CG 20 10 11 85, or if not available, through the addition of a combination of (1) CG 20 10, CG 20 26, CG 20 33, or CG 20 38 and (2) CG 20 37).
b. Primary Coverage: For any claims related to this Agreement, the Consultant's insurance shall be primary coverage at least as broad as Insurance Services Offices Form CG 20 01 04 13 as respects the City of Santa Monica, its officers, officials, employees and volunteers. Any insurance or self-insurance maintained by the City of Santa Monica, its officers, officials, employees or volunteers shall be in excess of the Consultant's insurance and shall not contribute with it. c. Notice of Cancellation: Each insurance policy required herein shall state that coverage shall not be cancelled except after notice has been given to the City of Santa Monica.
d. Waiver of Subrogation: Consultant hereby grants to the City of Santa Monica a waiver of any right of subrogation which any insurer of said Consultant may City of Santa Monica has received a waiver of subrogation endorsement from the insurer.
Self-Insured Retentions
Self insured retentions must be declared to and approved by the City of Santa Monica.
The City of Santa Monica may require the Consultant to purchase coverage with a lower retention or provide satisfactory proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention. The policy language shall provide, or be endorsed to provide, that the self insured retention may be satisfied by either the named insured or City of Santa Monica.
Acceptability of Insurers
Insurance is to be placed with insurers authorized to conduct business in California with a current A.M. Best rating of no less than A:VII, unless otherwise acceptable to the City of Santa Monica.
Claims Made Policies
1. If the Professional Liability policy provides "claims made" coverage:
a. The Retroactive Date must be shown and must be before the date of this Agreement or the start of work.
b. The insurance must be maintained, and evidence of insurance must be provided for at least 5 years after completion of work.
c. If the policy is cancelled or not renewed, and not replaced with another "claims made policy form with a Retroactive Date prior to the effective Agreement date, the Consultant must purchase "extended reporting" coverage for a minimum of 5 years after completion of work.
Verification of Coverage
Consultant shall furnish the City of Santa Monica with original certificates and amendatory endorsements (or copies of the applicable policy language effecting coverage provided by this clause). All certificates and endorsements are to be received and approved by the City of Santa Monica before work commences. However, failure to obtain required documents prior to the work beginning shall not waive the Consultant's obligation to provide them. The City of Santa Monica reserves the right to require complete, certified copies of all required insurance policies, including the endorsements required herein, at any time.
Failure to Maintain Insurance Coverage
If Consultant, for any reason, fails to maintain insurance coverage which is required pursuant to this Agreement, the same shall be deemed a material breach of contract. The City of Santa Monica, at its sole option, may terminate this Agreement and obtain damages from the Consultant resulting from said breach.
Subcontractors
Consultant shall require and verify that all subcontractors maintain insurance meeting all the requirements stated herein. All exceptions must be approved in writing by the Risk Manager.
Footnotes
# 1: Workers' Compensation insurance coverage is not required if the Consultant does not have employees. The Consultant must, however, execute the City's Workers' Compensation Coverage Exemption Declaration Form.