CITY OF SIGNAL HILL
STAFF REPORT
2175 Cherry Avenue • Signal
Hill, California 90755-3799
2/14/2023
AGENDA ITEM
TO:
HONORABLE MAYOR
AND MEMBERS OF THE CITY COUNCIL
FROM:
SHARON DEL ROSARIO
ADMINISTRATIVE SERVICES OFFICER/FINANCE DIRECTOR
COLLEEN T. DOAN
COMMUNITY DEVELOPMENT DIRECTOR
SUBJECT:
AUTHORIZE SOLICITATION OF A REQUEST FOR PROPOSALS FOR
PROFESSIONAL CONSULTING SERVICES TO CONDUCT A COMPREHENSIVE
FEE STUDY, DEVELOPMENT IMPACT FEE STUDY, AND A COST ALLOCATION
PLAN STUDY
Summary:
The City Council will consider authorizing staff to issue a Request for Proposals (RFP) for professional consulting services for a comprehensive fee study (also referred to as User Fee Study), comprehensive development impact fee study to support a citywide impact fee program that meets the requirements of the Mitigation Fee Act (California Government Code Section 66000 et seq., also known as “AB 1600”), and a Cost Allocation Plan (CAP) Study.
Recommendation:
Authorize the Finance Director to issue the RFP for professional consulting services for a comprehensive fee study, comprehensive development impact fee study to support a citywide impact fee program that meets the requirements of the Mitigation Fee Act (California Government Code Section 66000 et seq., also known as “AB 1600”), and a CAP Study.
Fiscal Impact:
There is no fiscal impact associated with the authorization to release the RFP. The operating budget includes funding to conduct an impact fee study within the administration division of $60,000 and staff is seeking to include the comprehensive user fees and cost allocation study in this review. If the responses to the RFP are higher than the current budget, staff would return to the City Council to CITY OF SIGNAL HILL Page 1 of 7 Printed on 2/10/2023
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request a budget adjustment.
Strategic Plan Objectives:
Goal No. 1: Ensure long-term fiscal stability.
Goal No. 6: Promote a transparent and open government.
Background:
A User Fee Study calculates the full cost of providing those services offered by various City departments, including all direct, indirect, and support costs. A CAP is an analytical tool through which a city can allocate administrative costs to individual departments within its organization. A CAP will incorporate appropriate general and administrative cost allocations into the budget as well as identify overhead rates that can be used in the calculation of billable hourly rates for grants, fees, federal reimbursements, and other billings. An updated CAP ensures that the City is utilizing comprehensive overhead rates and accurately accounting for the true cost of providing various programs and services within City operations and also ensures all charges are the “estimated reasonable cost of providing the service for which the fee is charged” (Government Code Section 66014).
The User Fee Schedule is updated annually in consideration of the Consumer Price Index (CPI) and on an as-needed basis. Various City departments have updated the schedule to reflect current services, changes in State law, increases in hourly rates and levels of support. The current fee schedule was adopted by the City Council on June 28, 2022, and became effective on September 1, 2022. In 2016, the City issued an RFP inviting proposals to develop and prepare a new CAP and to undertake a comprehensive citywide cost of services (user fees) and charges. The study was completed in 2018 and City Council adopted an updated user fee schedule and CAP. The study was completed by Willdan Financial Services (Willdan) and was based on the budget developed for Fiscal Year (FY) 2017-18 and service activity based on FY 2016-17. The City conducts a review study every three to five years to ensure the fees and charges reflect current costs.
Development Impact fees provide the proportionate share of the funding for the City’s capital facilities needs that can be reasonably attributed to new growth in the City. The revenue, in turn, provides the traffic, park and recreation, and water infrastructure and improvements necessary to mitigate the impacts of new residential, commercial and industrial development on the City and its residents and businesses. In order to ensure a reasonable relationship between the fee and the purpose for which it is charged, development impact fees are based on a mathematical calculation that considers future development, the facilities and infrastructure needed to serve that future development, and the estimated costs of those improvements. Absent a comprehensive impact fee update, the development impact fees are typically adjusted annually in accordance with the CPI and the average construction costs published by the International Code Council pursuant to the Signal Hill Municipal Code. The City’s impact fees were originally adopted in 1991 and an impact fee study has not been conducted since adoption, as a result, the City would like to conduct a review and update the adopted development impact fees (AB 1600) for traffic, parks and recreation, and water, and to assess a variety of development impact fees on new development to assist in mitigating citywide impacts on public improvements, public services, and community amenities. The City’s impact fee program must comply with all relevant sections of the Government Code.
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Analysis:
In order to select a firm to provide the City with professional consultant services, staff recommends Council authorize the issuance of an RFP (Attachment A). The RFP will describe the project, the required scope of services, the minimum information that shall be included in the proposal, and the selection process. Firms that fail to submit a proposal in accordance with the outlined procedures may be disqualified. The following provides a general overview of the RFP.
Estimated Schedule of Events
Staff recommends releasing the RFP as early as March 1, 2023, and award a contract no later than May 9, 2023. This schedule would include an evaluation process and committee review and allow sufficient time for the selected consultant to complete work within the City’s prescribed timeframes.
Sample Scope of Services Requested
Overview of the Project:
The City of Signal Hill is interested in engaging a consultant to work with staff to prepare a comprehensive fee study, development impact fee study, and a CAP (Projects). The contract may be awarded for one or all of the studies. The consultant will ensure that all project documents are both accurate and appropriate for the City’s current needs, and work with City staff on strategies to maximize cost recovery. General steps for each individual Project would include:
· Work with staff to define the purpose, uses, and goals of each Study or Plan. · Meet with staff and conduct interviews to gain an understanding of the City’s practices and operations.
· Review any existing documentation related to fees or the cost allocation plan, including but not limited to the City’s various master plans and other planning documents. · Provide any suggestions or strategies to improve cost recovery levels, and recommend any new fees, if necessary.
· Offer assistance in developing fee modification strategies that incentivize local policy goals. · Develop and present a draft and final report for City staff to review. · Provide staff with worksheets to support the components in the final plan in an excel or editable format, as well as any training on how to update any schedules that need to be revisited annually or until the next study.
· Produce a final written report based on specific project needs, which could include comparison with similar organizations.
· Present the information related to the User Fee Study and/or the Development Impact Fee to the City Council at a City Council Meeting. Additional specifics, related to individual plans will be listed in the Performance Specifications of the RFP.
Desired Outcome:
The desired outcome would be to receive a report that will be used to establish fees and allocate percentages/rates that support the full cost recovery of services; and a Development Impact Fee study that assists in mitigating citywide impacts on public improvements, public services, and CITY OF SIGNAL HILL Page 3 of 7 Printed on 2/10/2023
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community amenities. Individual performance requirements for each study are listed below:
Performance Requirements:
A: User Fee Study: The project tasks shall include, but are not necessarily limited to, the following. If the consultant feels that additional tasks are warranted, they must be clearly identified in the consultant’s proposal.
· Work and meet with City staff to refine the project scope, purpose, uses and goals of the City’s User Fee Study to ensure that the study will be both accurate and appropriate to the City’s needs. Review project schedule and answer any questions pertaining to the successful development of the Study.
· Conduct a comprehensive review of the City’s existing fees. For a list of City fees, see the Schedule of Service Fees and Charges (Exhibit A of the RFP), which is adopted annually and the current schedule is effective September 1, 2022. Identify the total cost of providing each City service and in a manner that is consistent with all applicable laws, statutes, rules and regulations governing the collection of fees, rates and charges by public entities. · Compare service costs with existing recovery levels. This should include any service areas where the City is currently charging for services as well as areas where the City, perhaps, should charge in light of the City’s practices, or the practices of similar or neighboring cities.
Include (as allowed by statutes/laws/rules/regulations) practices for deferral and/or forgiveness of fees and/or substitution of public services/facilities in lieu of fees for privately funded and City projects with public benefit. Include a comparison of current City practices and similar practices of similar or neighboring cities.
· Recommend appropriate fees and charges based on your analysis together with the appropriate subsidy percentage for those fees where full cost recovery may be unrealistic (e.g. senior services). Consider the cost of pre-application and post-application meetings to mitigate project problems, assist project proponents to prepare the application, emergency response cost recovery such as inspection costs after fires and/or acts of god and how those costs can be recovered, either on a permit specific basis or as an overall percentage applied to permit fees.
· Prepare a report that identifies each service, its full cost, recommended and current cost recovery levels. The report should also identify the direct cost, the indirect cost, and the overhead cost for each service; and provide a model for adjusting these fees for the City’s current and future needs.
· Prepare a report that identifies the present scope performed under the fee, the proposed scope performed under the recommended fee, present fees, recommended fees, percentage change, cost recovery percentage, revenue impact; and fee comparison with other Los Angeles County cities or other California cities that are comparable to Signal Hill. A survey comparison of fees with similar cities is for information only. · Report on other matters that come to your attention in the course of your evaluation that in your professional opinion the City should consider.
· Present your study to the City’s management team and make necessary adjustments as requested.
· Prepare and participate in presenting the plan to interested external parties (public meetings). · Assist the Administrative Services Department in presenting the plan to the City Council including public hearings and any required Prop 218 hearings/noticing. · Provide the City with an electronic copy of the final comprehensive study, including related CITY OF SIGNAL HILL Page 4 of 7 Printed on 2/10/2023
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· Provide the City with an electronic copy of the final comprehensive study, including related schedules and cost documentation in a format that can be edited and updated by City staff to accommodate changes in the organization or changes in costs. Develop a model for adjusting fees to include the addition of hypothetical service area information for future service enhancements, and the ability to calculate the estimated costs of providing the service under consideration (Scenario and “what if” analyses).
· Provide on-site training to enable staff to update fees. · Prepare a final fee study report in a single PDF file of the plan that can be made available to City staff. Any master fee schedule revisions developed shall be made available to the City electronically, providing the ability to add or delete and/or update information as needed. · Consult with City staff should it become necessary to defend the City’s User Fees as a result of any legal or other challenge.
B: Development Impact Fee Study: The City assesses a variety of cost recovery-based fees. The consultant (or consultants) will conduct a comprehensive update of the nexus analysis for these fees and explore adding development impact fees as appropriate. The City’s fees must comply with any applicable state and federal law including but not limited to the Mitigation Fee Act (California Government Code Section 66000 et seq., also known as Assembly Bill 1600). Project tasks shall include, but are not necessarily limited to, the following. If the consultant feels that additional tasks are warranted, they must be clearly identified in the consultant’s proposal. · Develop a comprehensive impact fee study in alignment with broad policies to adequately facilitate desired development within the City while supporting the City’s Capital Improvement Program.
· Conduct a comprehensive Development Impact Study in alignment with updated long-range planning policies and documents to complement development within the City and meet policy objectives.
· The consultant (or consultants) will be responsible for preparing background reports as well as technical reports documenting the study results for each fee. · Provide an overview of development impact fees and in-lieu fees in neighboring and/or similarsized cities as a means of comparison. · Provide City staff with an interactive tool that will ensure predictable and intuitive fees that are easily accessible and understandable to customers interested in calculating fees on their own for a particular type of project.
· Prepare and participate in presenting the plan to interested external parties (public meetings). · Assist the Administrative Services Department in presenting the plan to the City Council including public hearings and any required Prop 218 hearings/noticing.
C: Cost Allocation Plan: Develop a Full Cost Allocation Model for calculating the full costs of providing each city service. The requirements of the model shall allow for the following:
· Allow for Additions, revisions or removal of direct and overhead costs so that the cost allocation plan can be easily adapted to a range of activities both simple and complex. · Identify overhead rates that can be used in the calculation of billable hourly rates for user fees, and reimbursements from other governmental agencies.
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plan easily from year to year as the organization changes. · Identify hypothetical service area information for future service enhancements, and the ability to calculate the estimated cost of providing the service under consideration. · Comply with Title 2, Code of Federal Regulations, Part 225, Cost Principles for State, Local, and Indian Tribal Governments; as part of the cost allocation plan proposal, please provide the following: a) Provide a Methodology appropriate for the calculation and allocation of an overhead cost rate complying with Title 2, Code of Federal Regulations, Part 225, Cost Principles for State, Local, and Indian Tribal Governments. b) Prepare a study of each program with overhead costs that are borne in whole or in part by the General Fund that can receive overhead cost for reimbursement from State and Federal governments and/or other sources.
· Present the cost allocation plan to the City’s management group and make necessary adjustments as requested.
· Provide the City with an electronic copy of the final comprehensive review, including related schedules and cost determination in a format that can be edited and updated by City staff to accommodate changes in the organization or changes in costs. · Consult with City staff should the need arise to defend the cost allocation plan as a result of audits or other challenges.
Circulation Process
The RFP is tentatively scheduled to be circulated on March 1, 2023, for 4 weeks as follows:
· Posted on PlanetBids;
· Posted on the City’s website; and
· Posted and published at the City’s public notice locations.
RFP deadline for submission is tentatively scheduled for March 31, 2023.
Evaluation Process
The City will conduct a two-tiered evaluation process to select the best qualified firm that includes a review of the proposal materials and interviews of top finalists:
· Selection of a five-person review committee consisting of the City Manager, Finance Director, Community Development Director, Public Works Director, and Community Services Director. · The committee members will use ranking forms to review and score all accepted proposals with a focus on qualifications, proposed methodologies, and consideration of cost estimates in the selected categories with associated points.
Following completion of the evaluation, ranking process and interviews, staff will prepare a recommendation for City Council consideration. As these studies will require the contractor to interview staff, obtain an in-depth knowledge of the City’s needs and future development planning, staff estimates it may take six to nine months to complete the studies with a target completion date of February 2024 and presentation to the Council by March 2024 or earlier. The proposed schedule would also allow any approved recommendations to be incorporated in the FY 2024-2026 biennial budget cycle.
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Approved:
_________________________
Carlo Tomaino
Attachments:
1. Request for Proposals
2. Scheduled of Fees
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