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HomeMy WebLinkAboutCC Resolution 12341 (HF&H Rate ReviewRESOLUTION NO. 12341 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL AUTHORIZING THE CITY MANAGER TO ENTER INTO AN AGREEMENT WITH HF &H CONSULTANTS, LLC TO PERFORM A REVIEW OF MARIN SANITARY SERVICE'S 2008 RATE APPLICATION (Commencing September 5, 2007 and ending June 30, 2008) THE CITY COUNCIL OF THE CITY OF SAN RAFAEL RESOLVES as follows: The CITY MANAGER and CITY CLERK are authorized to execute, on behalf of the City of San Rafael, an agreement with HF & H Consultants for Refuse Rate Review of Marin Sanitary Service's Rate Application for the 2008 calendar year, a copy of which is hereby attached and by this reference made a part hereof. I, JEANNE M. LEONCINI, Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the City Council of said City held on Tuesday, the 4h day of September, 2007, by the following vote, to wit: AYES: COUNCILMEMBERS: Cohen, Heller, Miller, Phillips and Mayor Boro NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: NonE, CkZAAA.� A. JEANNE M. LEONCINI, City Clerk �a� AGREEMENT FOR: Review of Marin Sanitary Service's 2008 Rate Application This Agreement is made and entered into this 5tt' day of September 2007, by and between the CITY OF SAN RAFAEL (hereinafter "CITY"), and HF and H Consultants, LLC hereinafter "CONTRACTOR"). RECITALS WHEREAS, the City of Larkspur, the City of San Rafael, the Town of Ross, the County of Marin and the Las Gallinas Sanitary District (the "Franchisors Group") have similar franchise agreements with Marin Sanitary Services; and WHEREAS, the City of Larkspur, the City of San Rafael, the Town of Ross, the County of Marin and the Franchisors Group have utilized a jointly sponsored program to conduct reviews of Marin Sanitary Services operations and expenses pursuant to the Franchise Agreements; and WHEREAS, the Franchisors Group desires to utilize the services of HF& H Consultants to conduct the review. AGREEMENT NOW, THEREFORE, the parties hereby agree as follows: 1. PROJECT COORDINATION A. CITY. The City Manager shall be the representative of the CITY for all purposes under this Agreement. Economic Development Specialist, Stephanie Lovette, is hereby designated the PROJECT MANAGER for the CITY, and said PROJECT MANAGER shall supervise all aspects of the progress and execution of this Agreement. B. CONTRACTOR. CONTRACTOR shall assign a single PROJECT DIRECTOR to have overall responsibility for the progress and execution of this Agreement for CONTRACTOR. Marva Sheehan is hereby designated as the PROJECT DIRECTOR for CONTRACTOR. Should circumstances or conditions subsequent to the execution of this Agreement require a substitute PROJECT DIRECTOR for any reason; the CONTRACTOR shall notify the CITY within ten (10) business days of the substitution. 2. DUTIES OF CONTRACTOR CONTRACTOR shall perform the duties and/or provide services as described in Exhibit " A " attached and incorporated herein. 3. DUTIES OF CITY CITY shall cooperate with CONTRACTOR in his performance under this agreement and shall compensate CONTRACTOR as provided herein. 4. COMPENSATION For the full performance of the services described herein by CONTRACTOR, CITY shall pay CONTRACTOR an amount NOT to exceed $48,000, including the cost of local business license taxes as described in Section 20. Payment will be made monthly upon receipt by PROJECT MANAGER of itemized invoices submitted by CONTRACTOR. 5. TERM OF AGREEMENT The term of this Agreement shall commence upon the date of execution of this agreement and shall end on June 30, 2008. 6. TERMINATION A. Discretionary. Either party may terminate this Agreement without cause upon thirty (30) days written notice mailed or personally delivered to the other party. B. Cause. Either party may terminate this Agreement for cause upon ten (10) days written notice mailed or personally delivered to the other party, and the notified party's failure to cure or correct the cause of the termination notice, to the reasonable satisfaction of the party giving such notice, within thirty (30) days of the receipt of said notice. C. Effect of Termination. Upon receipt of notice of termination, neither party shall incur additional obligations under any provision of this Agreement without the prior written consent of the other. D. Return of Documents. Upon termination, any and all CITY documents or materials provided to CONTRACTOR and any and all of CONTRACTOR's documents described in paragraph 7 below, shall be delivered to CITY as soon as possible, but not later than thirty (30) days after termination. 7. OWNERSHIP OF DOCUMENTS The written documents and materials prepared by the CONTRACTOR in connection with the performance of its duties under this Agreement, shall be the sole property of CITY. CITY may use said property for any purpose, including projects not contemplated by this Agreement. 8. INSPECTION AND AUDIT Upon reasonable notice, CONTRACTOR shall make available to CITY, or its agent, for inspection and audit, all documents directly related to CONTRACTOR'S performance of its duties under this Agreement. CONTRACTOR shall fully cooperate with CITY or its agent in any such audit or inspection. 9. ASSIGNABILITY The parties agree that they shall not assign or transfer any interest in this Agreement nor the performance of any of their respective obligations hereunder, without the prior written consent of the other party, and any attempt to so assign this Agreement or any rights, duties or obligations arising hereunder shall be void and of no effect. 10. INSURANCE A. During the term of this Agreement, CONTRACTOR shall maintain, at no expense to CITY, the following insurance policies: 1. A comprehensive general liability insurance policy in the minimum amount of one million ($1,000,000) dollars per occurrence for death, bodily injury, personal injury, or property damage; 2. An automobile liability (owned, non -owned, and hired vehicles) insurance policy in the minimum amount of one million ($1,000,000) dollars per occurrence; 3. If any licensed professional performs any of the services required to be performed under this Agreement, a professional liability insurance policy in the minimum amount of one million ($1,000,000) dollars to cover any claims arising out of the CONTRACTOR's performance of services under this Agreement. B. The insurance coverage required of the CONTRACTOR by section 11. A., shall also meet the following requirements: 1. The insurance shall be primary with respect to any insurance or coverage maintained by CITY and shall not call upon CITY's insurance or coverage for any contribution; 2. Except for professional liability insurance, the insurance policies shall be endorsed for contractual liability and personal injury; 3. Except for professional liability insurance, the insurance policies shall be specifically endorsed to include the CITY, and other entities in the Franchisors' Group, their officers, agents, employees and volunteers as additionally named insureds under the policies; 3 4. CONTRACTOR shall provide to PROJECT MANAGER, (a) Certificates of Insurance evidencing the insurance coverage required herein, and (b) specific endorsements naming CITY, and other entities in the Franchisors' Group, their officers, agents, employees and volunteers as additional insureds under the policies; 5. The insurance policies shall provide that the insurance carrier shall not cancel, terminate or otherwise modify the terms and conditions of said insurance policies except upon thirty (30) days written notice to CITY's PROJECT MANAGER; 6. If the insurance is written on a Claims Made Form, then, following termination of this Agreement, said insurance coverage shall survive for a period of not less than five years; 7. The insurance policies shall provide for a retroactive date of placement coinciding with the effective date of this Agreement; 8. PROJECT MANAGER and the City Attorney shall approve the insurance as to form and sufficiency. C. If it employs any person, CONTRACTOR shall maintain worker's compensation and employer's liability insurance, as required by the State Labor Code and other applicable laws and regulations, and as necessary to protect both CONTRACTOR and CITY against all liability for injuries to CONTRACTOR's officers and employees. D. Any deductibles or self-insured retentions in CONTRACTOR's insurance policies must be declared to and approved by the PROJECT MANAGER and the City Attorney. At CITY's option, the deductibles or self-insured retentions with respect to CITY shall be reduced or eliminated to CITY's satisfaction, or CONTRACTOR shall procure a bond guaranteeing payment of losses and related investigations, claims administration, attorney's fees and defense expenses. 11. INDEMNIFICATION CONTRACTOR shall indemnify, release, defend and hold harmless CITY, and other entities in the Franchisors' Group, their officers, agents, employees and volunteers, against any claim, demand, suit, judgment, loss, liability or expense of any kind, including attorney's fees, arising out of or resulting in any way, in whole or in part, from any acts or omissions, intentional or negligent, of CONTRACTOR or CONTRACTOR's officers, agents and employees in the performance of their duties and obligations under this Agreement. 12. NONDISCRIMINATION CONTRACTOR shall not discriminate, in any way, against any person on the basis of age, sex, race, color, religion, ancestry, national origin or disability in connection with or related to the performance of its duties and obligations under this Agreement. 13. COMPLIANCE WITH ALL LAWS CONTRACTOR shall observe and comply with all applicable federal, state and local laws, ordinances, codes and regulations, in the performance of its duties and obligations under this Agreement. CONTRACTOR shall perform all services under this Agreement in accordance with these laws, ordinances, codes and regulations. CONTRACTOR shall release, defend, indemnify and hold harmless CITY, and other entities in the Franchisors' Group, their officers, agents and employees from any and all damages, liabilities, penalties, fines and all other consequences from any noncompliance or violation of any laws, ordinances, codes or regulations. 14. NO THIRD PARTY BENEFICIARIES CITY and CONTRACTOR do not intend, by any provision of this Agreement, to create in any third party, any benefit or right owed by one party, under the terms and conditions of this Agreement, to the other party. 15. NOTICES All notices and other communications required or permitted to be given under this Agreement, including any notice of change of address, shall be in writing and given by personal delivery, or deposited with the United States Postal Service, postage prepaid, addressed to the parties intended to be notified. Notice shall be deemed given as of the date of personal delivery, or if mailed, upon the date of deposit with the United States Postal Service. Notice shall be given as follows: TO CITY: Mr. Ken Nordhoff, City Manager City of San Rafael 1400 Fifth Avenue P.O. Box 151560 San Rafael CA 94915-1560 TO CONTRACTOR: Mr. Robert D. Hilton, President Hilton Farnkopf and Hobson, LLC 2175 North California Boulevard, Suite 990 Walnut Creek, CA 94596 16. INDEPENDENT CONTRACTOR For the purposes, and for the duration, of this Agreement, CONTRACTOR, its officers, agents and employees shall act in the capacity of an Independent Contractor, and not as employees of the CITY. CONTRACTOR and CITY expressly intend and agree that the status of CONTRACTOR, its officers, agents and employees be that of an Independent Contractor and not that of an employee of CITY. 5 17. ENTIRE AGREEMENT -- AMENDMENTS A. The terms and conditions of this Agreement, all exhibits attached, and all documents expressly incorporated by reference, represent the entire Agreement of the parties with respect to the subject matter of this Agreement. B. This written Agreement shall supersede any and all prior agreements, oral or written, regarding the subject matter between the CONTRACTOR and the CITY. C. No other agreement, promise or statement, written or oral, relating to the subject matter of this Agreement, shall be valid or binding, except by way of a written amendment to this Agreement. D. The terms and conditions of this Agreement shall not be altered or modified except by a written amendment to this Agreement signed by the CONTRACTOR and the CITY. E. If any conflicts arise between the terms and conditions of this Agreement, and the terms and conditions of the attached exhibits or the documents expressly incorporated by reference, the terms and conditions of this Agreement shall control. 18. WAIVERS The waiver by either party of any breach or violation of any term, covenant or condition of this Agreement, or of any ordinance law or regulation, shall not be deemed to be a waiver of any other term, covenant, condition, ordinance, law or regulation, or of any subsequent breach or violation of the same or other term, covenant, condition, ordinance, law or regulation. The subsequent acceptance by either party of any fee, performance, or other consideration which may become due or owing under this Agreement, shall not be deemed to be a waiver of any preceding breach or violation by the other party of any term, condition, covenant of this Agreement or any applicable law, ordinance or regulation. 19. COSTS AND ATTORNEY'S FEES The prevailing party in any action brought to enforce the terms and conditions of this Agreement, or arising out of the performance of this Agreement, may recover its reasonable costs (including claims administration) and attorney's fees expended in connection with such action. 20. CITY BUSINESS LICENSE/OTHER TAXES CONTRACTOR shall obtain and maintain during the duration of this Agreement, a CITY business license as required by the San Rafael Municipal Code. CONTRACTOR shall pay any and all state and federal taxes and any other applicable taxes. CONTRACTOR's taxpayer identification number is 94-3097242. and CONTRACTOR certifies under penalty of perjury that said taxpayer identification number is correct. n 21. APPLICABLE LAW The laws of the State of California shall govern this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day, month and year first above written. CITY OF SAN RAFAEL e4'X_" _� City IQIager ATTEST: Ci clerk APPROVED AS !� e City Attorney / ED\rdaspecial ist\projects\refuse\hf&hcontract08 CONTRACTOR By: Name: Title: E'� < c =HF LONSULx ANTS SL 2175 N. California Boulevard, Suite 990 Walnut Creek, California 94596 Telephone: 925/977-6950 Fax: 925/977-6955 www.hjh-consultants.com Sent via e-mail August 2, 2007 Ms. Jean Bonander City Manager City of Larkspur 400 Magnolia Ave. Larkspur, CA 94939 Mr. Jeff Rawles Manager Special Projects County of Marin 3501 Civic Center Drive, Room 404 San Rafael, CA 94903-4155 Mr. Mark Williams District Manager Las Gallinas Sanitary District 300 Smith Ranch Road San Rafael, CA 94903 EXHIBIT "A" Advisory Services to Municipal Management Mr. Kenneth A. Nordhoff City Manager City of San Rafael 1400 Fifth Avenue San Rafael, CA 94915-1560 Mr. Gary Broad Town Manager Town of Ross 31 Sir Francis Drake Blvd. Ross, CA 94957 Robert D. Hilton, CMC John W. Farnkopf, PE Laith B. Ezzet, CMC Subject: Proposal to Perform a Review of Marin Sanitary Service's Application for 2008 Rates Dear Ms. Bonander and Messrs. Nordhoff, Rawles, Broad, and Williams: HF&H Consultants, LLC (HF&H) is pleased to present this proposal to perform a review of Marin Sanitary Service's (MSS) application for rates to be effective January 1, 2008. Background In 1995, the Cities of San Rafael and Larkspur, the Town of Ross, the Ross Valley and Las Gallinas Sanitary Districts, and the County of Marin (the Franchisors) adopted a new methodology that would be used to set MSS's rates for refuse collection and disposal as well as recyclable and yard waste collection and processing. The methodology is based on a detailed review (performed every three years) with summary reviews (based largely on the detailed review, the use of indices, and the review of a few key matters such as revenues and disposal costs) during the intervening years. In 2002, MSS was awarded the franchise to provide services to the City of San Anselmo. Also in 2002, MSS was awarded the franchise to provide services to the north area of the Ross Valley ■ g.T_irji a iw Main Sanitary Service's Franchisors' Group August 2, 2007 Page 2 of 7 Advisory Services to Municipal Management Sanitary District (RVSD). In 2004, MSS acquired the Fairfax franchise. These expansions of service, and the need to allocate MSS's costs among the Franchisors and these new jurisdictions, make even more important the proper allocation of MSS's costs among the jurisdictions it services to ensure that the Franchisors are not paying a share of the costs to service San Anselmo, Fairfax, and the north area of the RVSD. In 2005, customers that were in the Las Gallinas Sanitary District franchise area were integrated into the customer base of the City of San Rafael. In 2006, the RSVD requested the County of Marin (County) accept and approve the transfer of the RSVD's solid waste franchise agreements, both North and South areas, with MSS. The South area was part of the Franchisors group. On July 11, 2006, the Board of Supervisors accepted the transfer of the RSVD South Franchise Agreement and executed a new agreement with MSS effective immediately. In 2006, the last detailed review was performed for rates to be effective in 2007. For a review of rates to be effective 2008, we have been asked to: • Perform the review using the index method; and, • Perform a survey of similar rates from cities in the Bay Area receiving comparable services. Scope of Work and Schedule We will perform the following tasks related to the review of MSS's Application. Task 1: Pre -Fieldwork 1.1 We will meet once with MSS management to receive the application and discuss the review schedule. 1.2 Thereafter, we will review the application to ensure that it is complete and in compliance with the methodology. Task 2: Review of Revenues HF&H will review MSS management's projection of collection and non -collection revenues for the 12 -month periods ending December 31, 2007, and 2008. We will compare the results to MSS's audited financial statements for rate year 2006 and year-to-date revenues for 2007 and request explanations for variances. Marin Sanitary Service's Franchisors' Group August 2, 2007 Page 3 of 7 Advisory Services to Municipal Management Task 3: Review of Expenses 3.1 FTF&H will review the appropriateness of MSS management's classification of expenses into the various expense categories. 3.2 We will review MSS management's calculation of rate year 2008 indexed expenses and compare them to the calculated expenses for 2007, established in our prior report, and the calculated changes to the indices determined in Task 1. 3.3 We will review MSS management's projection of other expenses including: • Depreciation/ Lease Expense, Interest Expense, Fuel and Insurance Expense projections will be reviewed by evaluating the reasonableness of MSS management's estimates for these expenses based on historical trends and MSS management's plans. • Disposal and Recyclables/Yard Waste Processing Expense will be reviewed by evaluating the reasonableness of MSS management's estimates for these expenses based on historical trends, management's plans, and adjustments to disposal and processing rates. Task 4: Review of Projected Profit HF&H will review MSS management's calculation of projected profit for compliance with the procedures and mathematical accuracy. Task 5: Review of Revenue and Expense Allocations HF&H will review the appropriateness of MSS management's allocation of revenues and expenses among the Franchisors and the new service areas, in accordance with the procedures developed in 2003. Task 6: Review of Adjustments 6.1 We will meet once with MSS management to review our adjustments to their calculated and projected revenues and expenses and their allocation among the Franchisors based on the recommended implementation method developed in Task 5, obtain management's comments, review any additional material, and amend our adjustments. 6.2 Thereafter, we will meet once with the Franchisors Group to present our adjustments to MSS's calculated revenues and expenses and its allocation among the Franchisors based on the recommended implementation method developed in Task 5. Advisory Services to Municipal Management Marin Sanitary Service's Franchisors' Group August 2, 2007 Page 4 of 7 Task 7: Communicate Findings 7.1 HF&H will distribute a copy of our initial draft report documenting our findings and recommendations for review by MSS management. Thereafter, we will meet once with MSS management to present and obtain its comments regarding our initial draft report. 7.2 We will make any appropriate adjustments to our initial draft report and present a preliminary draft to the Franchisors. 7.3 Based on comments from the Franchisors, we will amend the preliminary draft report and issue the final report. Task 8: Survey of Comparable Rates We will survey solid waste rates in the San Francisco Bay Area. We will identify communities with comparable services and contact them to solicit their participation and determine whether certain data is available. That data includes, but is not limited to, matters such as governmental fees, whether a transfer station is used, landfill disposal rates, whether employees are organized, and customer subscription data. As part of the survey, we will attempt to compare not only the absolute rates but also the rate structures so that we may identify differences in pricing (vs. cost). Task 9: Engagement Management We will prepare and amend detailed work plans, monitor engagement progress, and provide sufficient resources to ensure timely completion of the engagement, review analytical results and interim findings, review the draft and final reports, and respond to questions regarding the progress of the engagement and other issues. Limitations Every approach to an engagement is limited in its scope. The major limitations regarding our proposed scope of work are: • The scope of work described above is different from an audit of financial statements performed in accordance with Generally Accepted Auditing Standards, which is performed by MSS's auditor. We will perform the tasks presented above in a manner that will allow us to achieve the objectives of the review in a cost-effective manner. We will rely on MSS's auditor with regard to matters related to MSS's internal controls. Our testing of MSS's application (using judgmental samples of transactions and analytical procedures) will only be for the Marin Sanitary Service's Franchisors' Group August 2, 2007 Page 5 of 7 D Advisory Services to Municipal Management purpose of providing evidence that allows us to reach conclusions and recommendations regarding MSS's application. • We will conduct our review in accordance with the Rate Index Methodology adopted by the Franchisors Group. This methodology includes the review of MSS management's projection of the future results of operations. We will review these projections for reasonableness and propose adjustments, as appropriate. We accept no responsibility to update these adjusted projected results after the date of our report. Additionally, the projections result from assumptions regarding future events and management's planned response to them. Frequently, future events do not occur as anticipated and the difference can be material. We have not anticipated meeting with representatives of San Anselmo, Fairfax, or the County to discuss the impact of MSS serving the service areas outside of the Franchisors' service area. We would be pleased to do so on a time -and -materials basis. Further, we have neither included in the scope of our work modifications to any of the individual Franchisor's rates nor rate structures. If any of the Franchisors would like us to perform modifications to their rate structures, we would be pleased to do so based on arrangements made with the requesting Franchisor. Finally, we have not included in the scope of our work presentations to the Franchisors' governing bodies. However, we would be pleased to do so based on arrangements made with the requesting Franchisor. Firm and Proposed Enaaaement Team Qualifications Since its founding nearly 18 years ago, HF&H has been providing independent solid waste rate review services to municipalities throughout California and the West Coast. Of particular relevance to this engagement, HF&H has been the Franchisors' consultant in this area for more than 10 years. During that period, we have helped the Franchisors to substantially reduce the cost of the review through changes in methodology, while ensuring that both the customers' rates and MSS's level of profit are reasonable. I will be responsible for directing the project and will perform all sub -tasks related to the project management task described above, as well as attend all meetings with the Franchisors and key meetings with MSS management. I have been the Engagement Director and substantially involved in each of these annual reviews since 1995, and I am well known to both the Franchisors and MSS management. During the past 20 years, I have assisted more than 100 municipalities with nearly 400 solid waste consulting engagements, most of which have involved the cost of solid waste services. Marin Sanitary Service's Franchisors' Group August 2, 2007 Page 6 of 7 Advisory Services to Municipal Management I will be assisted by less senior, experienced staff at lower billing rates, who will perform certain tasks under my direction. Marva Sheehan will serve as Engagement Manager under my close supervision. Ms. Sheehan was the Engagement Manager during the 2006 index review and 2007 detail review. She is a Certified Public Accountant with over 25 years of accounting and auditing experience; 13 of which have been in the solid waste industry. She will supervise and review the work performed by the staff assigned to the project to ensure that it is performed in accordance with the proposed scope of work, our detailed work plans, and meets the Franchisor's objectives. Other staff will be assigned to perform specific tasks for which they are well qualified under the supervision of Mr. Hilton or Ms. Sheehan. Fees Based on our last Rate Index Methodology, my current understanding of the additional matters to be considered during this review, and the level of effort necessary to address them, I estimate our professional fees and out-of-pocket expenses for the scope of work described above to be $48,000, as shown on Attachment A. As in the past, we will bill you in accordance with our standard rates and practices, as described in Attachment B, up to the $48,000. It is possible that the level of effort to perform the review and address the additional matters may exceed our estimate and, if so, we will contact you before proceeding to obtain your approval or direction. Also, it is possible that our level of effort will be less and, if so, we will, of course, bill you the lesser amount. Proposed Schedule We have prepared the following proposed preliminary schedule: • MSS Submits Application September 7 • HF&H Commences Field Work September 10 • HF&H Completes Field Work October 5 • HF&H Reviews Results with MSS October 12 • HF&H Reviews Results with Franchisors October 19 • HF&H Provides MSS Draft Report October 25 • MSS Provides Comments on Draft Report October 31 14F HLF-ONSU,r TaNTs T L Advisory Services to Municipal Management Marin Sanitary Service's Franchisors' Group August 2, 2007 Page 7 of 7 • HF&H Presents Recommendations to Franchisors for Comment November 5 • HF&H Delivers Final Report November 12 • Boards/Councils Receive Report and Adopt Revised Rates November / December • Rates Effective January 1, 2008 The performance of our review, in accordance with the schedule described above, is dependent on: • The ability of MSS management to prepare its application and respond to questions in a timely manner; and • The ability of the Franchisors to provide necessary direction and comments to draft work products in a timely manner. We anticipate that neither MSS management nor the Franchisors will have difficulty performing in the manner we have assumed. Thank you for this opportunity to again be of service to you. If you have any questions, please call me at 925/977-6952. Very truly yours, HF&H CONSULTANTS, LLC Robert D. Hilton, CMC President Attachments: A) Fee Estimate B) Billing Rates cc: Mr. Joe Garbarino, Jr., Marin Sanitary Service Mr. Joe Garbarino, Sr., Marin Sanitary Service Ms. Patty Garbarino, Marin Sanitary Service Ms. Marva Sheehan, HF&H Ms. Kim Erwin, HF&H Attachment A Marin Sanitary Franchisor's Group Review of MSS Application for 2008 Rates HF&H Consultants, LLC August 2, 2007 Hours by Task and Staff Member Task Description Hilton SheehanAssociate Admin Total Hourly Ratel $ 235 l $ 185 l $ 155 l $ 75 l n/a 1 Pre -Field Work 1.1 Receive Application from Company 4 4 1.2 Review Application for Compliance 2 2 Task Subtotal 12 2 Review of Revenues 1 12 16 Task Subtotal 29 3 Review of Expenses 3 1 Classification of Expense 1 10 3.2 Calculation of Indexed Expenses 1 4 3.3 Review of Other Expenses 30 48 Task Subtotal 94 4 Review of Projected Profit 1 1 Task Subtotal 2 5 Review of Allocations 8 Task Subtotal 8 6 Review of Adjustments 6.1 Review with MSS Management 4 8 4 6.2 Review with Franchisors 4 6 Task Subtotal 26 7 Communicate Findings 7.1 Prepare Initial Draft and Meet with MSS Management 6 10 2 6 7.2 Prepare Preliminary Draft and Meet with Franchisors 2 4 1 7.3 Prepare and Distribute Final Report 4 4 1 Task Subtotal 40 8 Rate Comparison 8.1 Survey and Document Comparable Rates 1 4 16 0 Task Subtotal 21 9 Engagement Management 8 16 6 2 Task Subtotal 32 Total Hours 35 111 108 10 264 Fees $ 8,225 $ 20,535 $ 16,740 $ 750 $ 46,250 Out of Pocket Expense $ 1,750 Total Budget $ 48,000 HF&H Consultants, LLC August 2, 2007 Attachment B HF&H CONSULTANTS. LLC STANDARD HOURLY RATES AND BILLING ARRANGEMENTS' (Effective January 1, 2007) Professional Fees Hourly rates for professional and administrative personnel are as follows: Position Rate President $235 Senior Vice President & Vice President $180-$230 Senior Manager $175-$195 Senior Associate $145-$185 Associate Analyst $105-$155 Assistant Analyst $75-$95 Administrative Staff $75 Direct Expenses Standard charges for common direct expenses are as follows: Automobile Travel Document Reproduction Facsimile Telephone Public Conveyances Postage Overnight Mail and Couriers Billing Policies Prevailing IRS mileage rate 15 cents per page (black & white) 75 cents per page (color) No charge No charge Actual Actual Actual Our policy is to bill for our services and direct expenses based on the standard hourly rates of the staff member assigned, multiplied by the time required to perform the client -related tasks, plus the subcontractor services as described above. In implementing this policy we adhere to the following practices: 1 Litigation Support and Expert Witness Services are not covered by this schedule of fees and expenses. HF&H CONSULTANTS. LLC STANDARD HOURLY RATES AND BILLING ARRANGEMENTS) (Effective January 1, 2007) • It is our standard practice to e-mail invoices to our clients, although hard copies of invoices can be sent to clients on request. • We round to the nearest one-half hour (e.g., if two hours and 50 minutes are spent on a task, it is recorded as three hours, if two hours and 10 minutes are spent on a task, it is recorded as two hours). A minimum charge of one-half hour is charged for any client work performed in a day. • We attempt to schedule travel time before and after normal work hours and we do not bill for this time. If travel occurs during normal work hours and we can use public conveyances, we attempt to use the time productively for the benefit of the client or for another client and this time is billed to the appropriate client. If we must travel during business hours and cannot use the time productively or use a public conveyance, we bill the time to the client on whose behalf we are traveling. • Because public meetings (e.g., Board of Supervisors, City Council, and Board of Directors meetings) generally occur after business hours and are not conducted in accordance with strict schedules, our standard policy is to bill a minimum two-hour charge. • We do not mark up out-of-pocket expenses, however, we may charge administrative or professional time related to the provision of the goods and services associated with these charges. Costs for outside consultants and subcontractors are billed at actual cost plus a 15 percent administrative fee. • Mileage fees are based on the round-trip distance from the point of origin. • If a client's change to a previously scheduled meeting results in penalties being assessed by a third party (e.g., airline cancellation fee), then the client will bear the cost of these penalties. While no minimum fee for a consulting engagement has been established, it is unlikely (given the nature of our services) that we can gain an understanding of a client's particular requirement, identify alternatives, and recommend a solution in less than twenty-four hours. Insurance We maintain the following policies of insurance with carriers doing business in California: • Comprehensive General Liability Insurance ($2,000,000) • Workers' Compensation ($1,000,000) • Professional Liability Insurance ($2,000,000) HF&H Consultants, LLC Page 2 of 3 HF&H CONSULTANTS, LLC STANDARD HOURLY RATES AND BILLING ARRANGEMENTS) (Effective January 1, 2007) All costs incurred in complying with special insurance, licensing, or permit requirements, including but not limited to naming client as an additional insured and waiver of subrogation, become the responsibility of the client and are not included in the fees for services or direct charges but are billed in addition to the contract at cost, plus any professional or administrative fees. Invoices and Payment for Services Our time reporting and billing system has certain standard formats that are designed to provide our clients with a detailed invoice of the time and charges associated with their engagement. (We typically discuss these with our clients at our kick-off meeting.) We are also pleased to provide our clients with a custom invoice format but we will have to bill the client for any additional costs associated with their unique requirements. Billings for professional services and charges are submitted every month, in order that our clients can more closely monitor our services. A late fee of one and one-half percent per month is applied to balances unpaid after thirty (30) days. HF&H Consultants, LLC Page 3 of 3 ACORD CERTIFICA' 'OF UABUTY INSURAK FE OP ID LC DATE(MIWDD/YYYY) ____..._.. 09 06 07 -PRODUCER — - THIS CERTIFICATE IS ISSUED AMMAN OF INFORMATIOP. California Coastal Insurance ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE License #0381524 HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR 2262 Camino Ramon PO BOX 5076 ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW S R94583 13 an amon CA - 28 Phone:925-866-7050 Fax:925-866-8275 INSURED HF&H Consultants, LLC 2175 N California Ste 990 Walnut Creek CA 91596 INSURERS AFFORDING COVERAGE MAIC # INSURER A Preferred Employers Ins. Co. INSURER B: Houston Casualty Company INSURER C: Hartford Insurance Company 22357 INSURER D' INSURER E COVERAGES THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR ADEY POLICY EFFECTIVE POLICY EXPIRATION LTR NSR TYPE OF INSURANCE POLICY NUMBER DATE (MMIDDIYY) DATE (MMIDD/YY) LIMITS GENERAL LIABILITY EACH OCCURRENCE $ 1,000,000 DAMAGE RE C X X COMMERCIAL GENERAL LIABILITY 57SBAGB6653 12/15/06 12/15/07 PREMSESD(Ea occurence) $ 300,000 ICLAIMS MADE 1_x I OCCUR MED EXP (Any one person) $ 10,000 GEN'L AGGREGATE LIMIT APPLIES PER: POLICY n JEC r LOC AUTOMOBILE LIABILITY C ANY AUTO ALL OWNED AUTOS SCHEDULED AUTOS X HIRED AUTOS X NON -OWNED AUTOS GARAGE LIABILITY ANY AUTO EXCESSIUMBRELLA LIABILITY C OCCUR F CLAIMS MADE DEDUCTIBLE X RETENTION $10,000 WORKERS COMPENSATION AND EMPLOYERS' LIABILITY A ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEMBER EXCLUDED? If yes, describe under SPECIAL PROVISIONS below OTHER PERSONAL & ADV INJURY $ 1,000,000 GENERAL AGGREGATE s2,000,000 PRODUCTS - COMP/OPAGG $ 2,000,000 57SBAGB6653 12/15/06 12/15/07 COMBINED SINGLE LIMIT (Ea (Ea accident) 1,000,000 BODILY INJURY $ (Per person) BODILY INJURY $ (Per accident) PROPERTY DAMAGE $ (Per accident) AUTO ONLY - EA ACCIDENT $ OTHER THAN EA ACC $ AUTO ONLY: AGG $ EACH OCCURRENCE s2,000,000 57SBAGB6653 12/15/06 12/15/07 AGGREGATE $ 2,000,000 $ S X II IOER TORY LIMITS WKN1121426 09/06/07 09/06/08 E.L. EACH ACCIDENT $1,000,000 B Professional Liab H70713300 E.L. DISEASE - EA EMPLOYEE S 1,000,000 E.L. DISEASE -POLICY LIMIT $ 1 000,000 06/01/071 06/01/08 Occ/Agg 2,000,000 DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES I EXCLUSIONS ADDED BY ENDORSEMENT I SPECIAL PROVISIONS This insurance shall be primary with respect to any insurance or coverage maintained by City and shall not call upon City's insurance for coverage or contribution. The city and their officers, agents, employees and volunteers are included as additional insured under the general liability policy. *10 day notice of cancellation for non-payment of premium. CP.RTWICAFT9. HOLDER CANCELLATION SANRAFC SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL 30* DAYS WRITTEN i U JT {.7 q:Lty-, Of Sari Rafael NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO DO SO SHALL -Attu: Risk Mangement IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER, ITS AGENTS OR P.O. Box 151560 Sari Rafael CA 94915 REPRESENTATIVES. AUTHORI - REPRESENTATIVE ACORD 25 (2001/08) (�`-"'� © ACORD CORPORATION I THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURE® m DESIGNATED PERSON OR ORGANIZAVON This endorsement modifies insurance provided under the following: 57SBAGB6653 BUSINESS LIABILITY COVERAGE FORM C. Who is an insured in the BUSINESS LIABILITY COVERAGE FORM is amended to include as an insured the person or organization shown in the Declarations but only with respect to liability arising out of the operations of the named insured. For losses covered under the BUSINESS LIABILITY COVERAGE of this policy this insurance is primary to other valid and collectible insurance which is available to the person or organization shown in the Declarations as an Additional Insured. The City of San Rafael and its officers, agents, employees and volunteers Form SS 04 419 05 93 Printed in U.S.A. (NS) Copyright, Hartford Fire Insurance Company, 1993