HomeMy WebLinkAboutCC Resolution 13027 (MSS Rates 2011)RESOLUTION NO. 13027
RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO
AN AGREEMENT WITH HF&H CONSULTANTS, LLC TO PERFORM A
REVIEW OF MARIN SANITARY SERVICE'S 2011 RATE APPLICATION
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, LLC for Refuse Rate Review of Marin Sanitary
Service's Rate Application for the 2011 calendar year, in a form to be approved by the City
Attorney. The agreement shall be on the terms described in the August 5, 2010 HF&H Consultants,
LLC Proposal attached hereto as Exhibit A and incorporated herein by reference.
I, ESTHER C. BEIRNE, 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 Monday the 16h day of August, 2010, by the following vote, to wit:
AYES: COUNCILMEMBERS: Brockbank, Connolly, Heller, Levine & Mayor Boro
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
ESTHER C. BEIRNE, City Clerk
AGREEMENT
FOR: Review of Marin Sanitary Service's
2011 Rate Application
This Agreement is made and entered into this 19 th dam of August 2010, 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:
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 $60,000, 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, 2011.
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.
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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;
9
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.
4
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.
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
�) "'o
A!kanager
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
CONTRACTOR
By:
Name:
Title:
VA
O
HF.H ONSULTAN�LL
201 N. Civic Drive, Suite 230
Walnut Creek, California 94596
Telephone: 925/977-6950
Fax: 925/977-6955
www.hfh-consultants.com
Sent via e-mail and First Class Mail
August 5, 2010
Mr. Daniel Schwarz
City Manager
City of Larkspur
400 Magnolia Avenue
Larkspur, CA 94939
Mr. Michael Frost
Deputy Director of Public Works
County of Marin
65 Mitchell Blvd., Suite 200-B
San Rafael, CA 94903-4155
Mr. Mark Williams
District Manager
Las Gallinas Valley Sanitary District
300 Smith Ranch Road
San Rafael, CA 94903
Managing Tomorrow's Resources Today
Robert D. Hilton, CMC
John W. Farnkopf, PE
Laith B. Ezzet, CMC
Richard J. Simonson, CMC
Marva M. Sheehan, CPA
Mr. Kenneth A. Nordhoff
City Manager
City of San Rafael
1400 Fifth Avenue, Room 203
P.O. Box 151560
San Rafael, CA 94915-1560
Mr. Gary Broad
Town Manager
Town of Ross
31 Sir Francis Drake Boulevard
Ross, CA 94957
Subject: Proposal to Perform a Review of Marin Sanitary Service's Application for 2011 Rates
Dear Messrs. Schwarz, Nordhoff, Frost, 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, 2011.
In 1995, the Cities of San Rafael and Larkspur, the Town of Ross, the Ross Valley and Las Gallinas Valley
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 yardwaste 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.
ATTACHMENT A
Managing Tomorrow's Resources Today
Marin Sanitary Service's Franchisors' Group
August 5, 2010
Page 2 of 8
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 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 Valley 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, to 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.
Last year, we performed a review of the rate adjustment using the detailed method. For a review of
rates to be effective 2011, we have been asked to:
• Perform the review using the index (summary) method;
• Review and evaluate new programs desired by the Franchisors and MSS; 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 the Franchisors and MSS to discuss the review process and any new
programs desired by the Franchisors and MSS.
1.2 We will meet once with MSS management to receive the application and discuss the review
schedule.
1.3 Thereafter, we will review the application to ensure that it is complete and in compliance with
the methodology.
Managing Tomorrow's Resources Today
Marin Sanitary Service's Franchisors' Group
August 5, 2010
Page 3 of 8
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, 2010, and 2011. We will compare the results to MSS's audited
financial statements for rate year 2009 and year-to-date revenues for 2010 and request explanations for
variances.
Task 3: Review of Expenses
3.1 HF&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 2011 indexed expenses and compare
them to the calculated expenses for 2009, 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/Yardwaste 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 other service areas, in accordance with the procedures developed in
2003.
009191
=L7—
Managing Tomorrow's Resources Today
Marin Sanitary Service's Franchisors' Group
August 5, 2010
Page 4 of 8
Task 6: Evaluation of New Programs
6.1 At the direction of the Franchisors, we will review and evaluate the new programs desired by
the Franchisors and MSS and determine the potential customer rate impact of the programs.
6.2 We will meet once with the Franchisors to discuss the findings from our review of the new
programs.
Task 7: Review of Adjustments
7.1 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.
7.2 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.
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: Communicate Findings
9.1 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.
9.2 We will make any appropriate adjustments to our initial draft report and present a preliminary
draft to the Franchisors.
Managing Tomorrow's Resources Today
Marin Sanitary Service's Franchisors' Group
August 5, 2010
Page 5 of 8
9.3 Based on comments from the Franchisors, we will amend the preliminary draft report and issue
the final report.
Task 10: 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.
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 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 meet with them on a time -and -materials basis.
Further, our scope of work does not include modifications to any of the individual Franchisor's rates or
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.
t=� Managing Tomorrow's Resources Today
Marin Sanitary Service's Franchisors' Group
August 5, 2010
Page 6 of 8
f'irni and Proposed Engagement Team Qualifications
Since its founding over 20 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.
Bob Hilton, President, will be responsible for directing the project and will be responsible for your
satisfaction will the engagement. Mr. Hilton has been the Engagement Director and substantially
involved in each of these annual reviews since 1995, and is well known to both the Franchisors and MSS
management. During the past 20 years, Bob Hilton has assisted more than 150 municipalities with
nearly 750 solid waste consulting engagements, most of which have involved the cost of solid waste
services.
Marva Sheehan, Vice President, will serve as Engagement Manager under Mr. Hilton's supervision. Ms.
Sheehan has been the Engagement Manager for the MSS reviews since 2006. She is a Certified Public
Accountant with over 25 years of accounting and auditing experience; 18 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.
Mr. Hilton and Ms. Sheehan will be assisted by less senior, experienced staff at lower billing rates, who
will perform certain tasks under their direction
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 $60,000, as
shown on Attachment A. This includes $10,000 to review new programs desired by the Franchisors and
MSS.
As in the past, we will bill you in accordance with our standard rates and practices, as described in
Attachment B, up to the $60,000. 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.
mi . l M
Managing Tomorrow's Resources Today
Marin Sanitary Service's Franchisors' Group
August 5, 2010
Page 7 of 8
Proposed Schedule
We have prepared the following proposed preliminary schedule:
• MSS Submits Application
September 17
• HF&H Commences Field Work
September 20
• HF&H Completes Field Work
October 11
• HF&H Reviews Results with MSS
October 15
• HF&H Reviews Results with Franchisors
October 20
• HF&H Provides MSS Draft Report
October 29
• MSS Provides Comments on Draft Report
November 5
• HF&H Presents Recommendations to Franchisors for Comment
November 12
• HF&H Delivers Final Report
November 19
• Boards/Councils Receive Report and Adopt Revised Rates
November/December
• Rates Effective
January 1, 2011
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.
_e
Managing Tomorrow's Resources Today
Marin Sanitary Service's Franchisors' Group
August 5, 2010
Page 8 of 8
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) Standard Hourly Rates and Billing Arrangements
cc: Mr. Joe Garbarino, Jr., Marin Sanitary Service
Ms. Patty Garbarino, Marin Sanitary Service
Mr. Neil Roscoe, Marin Sanitary Service
Ms. Stephanie Lovette, City of San Rafael
Ms. Marva Sheehan, HF&H
Ms. Kim Erwin, HF&H
Attachment A - Fee Estimate
Marin Franchisors Group
Review of MSS 2011 Rate Adjustments Application
Task 1
Task Title
1a
Kick-off Meeting with Franchisors Group
6
6
0
0
0
12
$2,820
1b
Kick-off Meeting with Company
0
4
4
0
0
8
$1,600
1c
Completeness & Compliance Review
0
0
1
2
0
3
$485
1d
Math Accuracy & Logical Consistency
0
0
1
2
0
3
$485
Task 1
6
10
6
4
0
26
1 $5,390
Task 2
Review of Revenues
2a
Review of proper application of prior year rate adjustment
0
0
0
8
0
8
$1,240
2b
Review of projected revenues
0
0
10
0
0
10
$1,750
2d
Summarize Findings
1
4
2
0
0
7
$1,495
Task 2
1
4
12
8
0
25
$4,485
Task 3
Review of Expenses
3a
Classification of Expenes
0
1
8
3
0
12
$2,090
3b
Calculation of Indexed Expenses
0
1
4
5
0
10
$1,700
3c
Review of Fuel, Depreciation, Interest, JPA fees and
0
4
24
24
0
52
$8,820
Disposal
3d
Summarize Findings
1
4
5
5
0
15
$2,795
Task 3
1
10
41
37
0
B9
$15,405
Task 4
Review of Projected Profit
4a
Review Calculation of Profit
0
1
1
0
0
2
$400
Task 4
0
1
1
0
0
2
I $400 I
Task 6
Review of Allocations
5a
Review Allocations for Reasonableness and Consistency
0
2
6
0
0
8
$1,500
Task 5
0
2
6
0
0
a
$1,500
Task 6
Evaluation of New Programs
5a
Evaluate the financial impact of the new programs on
4
6
6
0
0
16
$3,380
customer rates
6b
Attend meeting with Franchisors and MSS management
0
8
16
0
0
24
$4,600
to discuss the findings from the evaluation of the new
programs
6c
Summarize Findings
1
2
8
0
a
11
$2,095
Task 6
5
16
301
0
0
51
$10,075
HFBH Consultants, LLC
8/5/2010
Attachment A - Fee Estimate
Marin Franchisors Group
Review of MSS 2011 Rate Adjustments Application
Task 7 Review of Adjusments
7a
Review with MSS Management
0
4
6
0
0
10
$1,950
7b
Review with Franchisors Group
0
4
6
0
0
10
$1,950
4
Task 7
0
8
12
0
0
10
1 $3,900
Task 8
Rate Comparisons
0
12
$2,700
Task 9
3
24
18
8a
Survey and Document Comparable Rates
0
2
2
0
12
16
$1,880
Task 8
0
2
2
0
12
16
$1,880
Task 9 Communication of Findings
9a Prepare draft report and meet with MSS management
2
4
6
0
4
16
$2,800
9b Prepare draft and meet with Franchisors
0
4
6
0
1
11
$2,040
9c Prepare and distribute Final Report
1
4
4
0
1
10
$1,935
9d Attend council meetings
0
12
0
0
0
12
$2,700
Task 9
3
24
18
0
6
49
$4,840
Engagement Management
2
8
16
6
0
$6,020
Total Costs
Labor
18
85
142
55
18
286
$56,530
Out-of-pocket Expenses
$1,470
Total Budget
$60,000
HF&H Consultants, LLC
8/5/2010
Attachment B
Standard Hourly Rates and Billing Arrangements
HF&H CONSULTANTS, LLC
STANDARD HOURLY RATES AND BILLING ARRANGEMENTS'
(Effective January 1, 2010)
Professional Fees
Hourly rates for professional and administrative personnel are as follows:
Position
President
Senior Vice President & Vice President
Senior Manager/Senior Project Manager
Senior Associate
Associate Analyst
Assistant Analyst
Administrative Staff
Direct Expenses
Standard charges for common direct expenses are as follows:
Automobile Travel
Document Reproduction
Facsimile
Telephone
Public Conveyances
Postage
Overnight Mail and Couriers
Rate
$245
$210-$245
$210-$225
$170-$195
$125-$165
$100-$105
$90
Prevailing IRS mileage rate
15 cents per page (black & white)
75 cents per page (color)
No charge
No charge
Actual
Actual
Actual
1 Litigation Support and Expert Witness Services are not covered by this schedule of fees and expenses.
HF&H Consultants, LLC Page 1 of 3
Attachment B
Standard Hourly Rates and Billing Arrangements
Billing Policies
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:
• 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.
HFH Consultants, LLC Page 2 of 3
Attachment B
Standard Hourly Rates and Billing Arrangements
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)
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