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HomeMy WebLinkAbout07/01/2003, C9 - FEASIBILITY ANALYSIS OF 2004 REVENUE BALLOT MEASURE co Un Cl t MaA,Dm' ` f 7-1-03 acenaa Report '®N.6�oA CITY OF SAN LUIS 0BISP0 (1 j�L tG FROM: Bill Statler, Director of Finance SUBJECT: FEASIBILITY ANALYSIS OF 2004 REVENUE BALLOT MEASURE CAO RECOMMENDATION Approve an agreement with The Lew Edwards Group to analyze the feasibility of a revenue ballot measure in 2004. DISCUSSION Overview As part of the 2003-05 Financial Plan, the Council appropriated $37,500 for a professional analysis of the feasibility of a revenue ballot measure in 2004. This is an integral component of the work program for the Major City Goal for Long-Term Fiscal Health (page B-62 of the 2003- 05 Financial Plan). The purpose of the proposed agreement is to perform this analysis. Background Balancing the budget for 2003-05 required significant reductions in operating programs and capital improvement plan (CIP) projects in closing a$7 million General Fund budget gap. While the adopted budget-balancing strategy will go a long way towards stabilizing our budget situation after 2003-05, it is based on a significantly reduced CIP that will not be good for the community over the long term. And funding a sufficient CII' beyond 2003-05 will be even harder, since the budget-balancing strategy for 2003-05 uses projected reserves that are above our policy minimum (about $1.6 million). This won't be available after 2003-05: we can only use reserves once. Additionally, while many people say that they want "less government," the fact is that our surveys—and our daily experience—show that we mostly face requests for more service, not less. So, while our immediate goal for 2003-05 to "stop the bleeding" has been accomplished, we will have to continue to work on ways of "re-tooling" the organization and developing new revenue sources if we want to meet our community's needs and hopes for the long term. Revenue Ballot Measure. Under Proposition 218, implementation of any significant new revenues will require voter approval. A number of communities have been successful in doing so; however, this has only occurred when there have been serious fiscal problems of crisis proportions, or a.compelling vision for the use of the new revenues.. Although they were driven by very different factors—hopes versus fears—all of these successful efforts share one thing in common: they were the result of extensive community-based efforts, which included a combination of outreach tools and professional assistance to use them Feasibility Analysis of 2004 Revenue Ballot Measure Page 2 effectively, such as scientific public opinion research, education programs and a strong follow-on advocacy group that will aggressively raise funds and campaign for the issue once it is on the ballot. This last issue cannot be stressed enough. Under State law, cities have broad discretion in using their funds for professional assistance in researching issues, conducting surveys and developing voter support strategies. However, once an issue becomes a formal ballot measure, cities cannot participate as an advocate in any way. In short, unless there is a strong community-based group that is willing to aggressively raise funds and campaign for the measure, it is not likely to pass. Related Past Work. The City completed a similar analysis in May 2000 with the assistance of The Lew Edwards Group and Fairbank, Maslin, Maullin & Associates (FMMA). While the results were generally favorable, the Council decided not to go forward with a revenue measure at that time. Due to significant changes in the economic and fiscal environment since then, we do not recommend relying upon the results of this three-year old analysis. However, as discussed in the Long-Terni Fiscal Health work program, we recommend retaining the same team based on the quality of their work and their familiarity with the City. Timing. Under Proposition 218, new or increased general-purpose taxes require majority voter approval, and the measure must be held at the same time as Council elections. This means that the soonest that a general-purpose tax measure could be submitted to the voters is November 2004. On the other hand, special taxes require two-thirds majority approval, but the election can be held at any time. However, research shows that tax measures typically do better when held in conjunction with general elections, rather than as "stand alone" items. With this approach, the soonest that a special tax measure should be submitted to the voters is March 2004. In either case, in order to be ready for a revenue ballot measure at some point in 2004, the feasibility analysis needs to begin right away. Workscope A detailed description of the workscope is provided in Exhibit A of the proposed agreement. The key objectives of the analysis are to: 1. Assess the overall feasibility of a ballot measure in 2004, including public opinion research. 2. Identify programs and projects most likely to generate broad-based community support. 3. Recommend a majority or two-thirds voter approval measure. 4. Advise on the best increased or new revenue sources, and the amount they should raise. 5. Advise on the best timing for a2004 ballot measure: March or November. 6. Evaluate community-group resource requirements, and the likelihood that such group will be formed. Consultant Selection As noted above, we recommend contracting with The Lew Edwards Group for this analysis. They are one of the premier firms in California in assessing the feasibility of revenue ballot (2 A ' c� Feasibility Analysis of 2004 Revenue Ballot Measure Page 3 (non-advocacy) phase. In 2002, they successfully directed more than $6.5 billion in education bonds and public finance measures, with a 90% passage rate for such measures. In November 2001, they had a 100% success rate on the measures they worked with. Moreover, we were very pleased with the work that they did for us in 2000, and their familiarity with the City means that they will be able to "hit the ground running" on this assignment. Schedule: Phase I Services bate 1. Approve contract with The Lew Edwards Group. July 1,2003 2. Hold kick-off planning session with City; review needs and issues. July 18 3. Complete initial draft of survey. July 25 4. Finalize survey. August 1 5. Pre-test and conduct survey. August 8 6. Complete and submit "top-line"results. August 15 7. Complete with cross tabulation of data, analyze results and begin developing August 22 options and recommendations. 8. Submit final report to City on feasibility September 1 9. Present results to the Council: City decides on whether to proceed to Phase II: September 16 Public Information and Outreach. As reflected above, we hope to present the results of the analysis to the Council at their September 16 meeting. Depending upon the results, the Council may decide to go forward with the next step: Phase II—Public Information and Outreach. While the proposal from The Lew Edwards Group includes "Phase II" services, the proposed agreement only funds "Phase P' (feasibility assessment) services. Should the Council decide to go forward with the next phase in September, we can amend the agreement at that time. FISCAL IMPACT The 2003-05 Financial Plan appropriates $37;500 for this work(pages B-62 and D-153). ALTERNATIVES 1. Do not consider the feasibility of revenue ballot measure in 2004. Future operating programs and CIP projects will be limited to existing revenue sources if the City does not explore alternative revenue options. This will significantly limit our ability to maintain current service levels and adequately maintain existing assets – let alone achieve our long- term CIP goals. 2. Consider a revenue ballot measure in 2004 but do not use professional assistance in preparing for it. Based on the experience of other communities, this is likely to result in an unsuccessful ballot measure. � r3 Feasibility Analysis of 2004 Revenue Ballot Measure Page 4 3. Issue a request for proposals. Given the qualifications of The Lew Edwards Group and their past performance with the City, this is unlikely to result in a different outcome. However, it will require greater staff effort; and delayed completion of the analysis would preclude the option of a March 2004 measure. ATTAC)E N ENT Agreement with The Lew Edwards Group to analyze the feasibility of a revenue ballot measure in 2004. G:2004 Ballot Measure Preparation/Feasibility Assessment/Agenda Report On -� h � AGREEMENT e!: ...' �--. y;•. .. �_y,�.... ..� .. `` °i-6s"` i.: a/. ' � ..mss THIS AGREEMENT is made and entered into in the City of San Luis Obispo on July 1, 2003 by and between the CITY OF SAN LUIS OBISPO, a municipal corporation, hereinafter referred to as City, and THE LEW EDWARDS GROUP, hereinafter referred to as Contractor. WITNESSETH: WHEREAS,the City wants to evaluate the feasibility of a revenue ballot measure in 2004;and WHEREAS, Contractor is qualified to perform this type of service and has submitted a proposal to do so, which has been accepted by City. NOW THEREFORE, in consideration of their mutual ,promises, obligations and covenants hereinafter contained,the parties hereto agree as follows; 1. TERM. The term of this Agreement shall be from the date this Agreement is made and entered, as first written above,until acceptance or completion of said services. 2. CITY'S OBLIGATIONS. For providing services as specified in this Agreement, City will pay and Contractor shall receive therefor compensation in a total sum not to exceed$37,500. 4. CONTRACTOR'S OBLIGATIONS. For and in consideration of the payments and agreements hereinbefore mentioned to be made and performed by City, Contractor agrees with City to provide "Phase I: Feasibility Assessment services as set forth in Exhibit A attached hereto and incorporated into this Agreement. .Contractor further agrees to the contract performance terms as set forth in Exhibit B attached hereto and incorporated into this Agreement. 5. AMENDMENTS. Any amendment, modification or variation from the terms of this Agreement shall be in writing and shall be effective only upon approval by the City Administrative Officer of the City. 6. COMPLETE AGREEMENT. This written Agreement, including all writings specifically incorporated herein by reference, shall constitute the complete agreement between the parties hereto. No oral agreement, understanding, or representation not reduced to writing and specifically incorporated herein shall be of any force or effect, nor shall any such oral agreement, understanding, or representation be binding upon the parties hereto. OP -S Agreement Page 2 7. NOTICE. All written notices to the parties hereto shall be sent by United States mail, postage prepaid by registered or certified mail addressed as follows: City City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo,CA 93401 Contractor The Lew Edwards Group 5251 Desmond Street Post Office Box 21215 Oakland,CA 94618 Attention:Catherine Lew 8. AUTHORITY TO EXECUTE AGREEMENT. Both City and Contractor do covenant that each individual executing this agreement on behalf of each party is a person duly authorized and empowered to execute Agreements for such party. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first above written. ATTEST: CITY OF SAN LUIS OBISPO,A Municipal Corporation By: Lee Price,City Clerk Mayor David F. Romero APPROVED AS TO FORM: CONTRACTOR By: J n P.Lowell,City Attorney %a - � Exhibit. A • Proposal to Provide Feasibility Services for the City of San Luis Ob4po's Potential 2004 Revenue Ballot Measure Introduction & Firm Philosophy The Lew Edwards Group (LEG) and its team partner on this proposal—Fairbank, Maslin, Maullin & Associates (FMM&A) are uniquely qualified to serve the needs of the City of San Luis Obispo as you assess the feasibility of a potential revenue ballot measure in 2004. We were pleased to serve the City in 2000 and would be happy to do so.again.. The Lew Edwards Group specializes in preparing public agencies for difficult, two-thirds tax, bond or finance elections during the nonadvocacy stage. Lew Edwards Group clients include public agencies such as cities, counties, school districts, community college districts, fire districts, and libraries in jurisdictions throughout California. Our firm's philosophy and mission is to improve the quality of life in local communities. In order to ensure that the City of San Luis Obispo is effectively positioned for a successful election, we will provide overall direction for your feasibility effort, which includes feasibility assessment, public information, and the development of strategies to methodically educate your constituents to build support for your needs. Background and Oualifications The Lew Edwards Group is a California leader for directing public agency, education and outreach programs during the pre-election (nonadvocacy) phase. Our firm prides itself on providing individualized, quality service to each of our clients. Our firm principals and consultants have decades of experience in media relations, community outreach, government affairs, election campaigns, and grassroots organizing. I In 2002, LEG successfully directed more than $6.5 Billion in education bonds and public finance measures, a 90% firm passage rate for such measures—In November 2001, LEG had a 100% success rate on its campaigns. A-1 N _ q r � � Exhibit A Lew Edwards Group personnel are experts in the arena of revenue ballot feasibility work. Selected clients of LEG include: • City of Lawndale (Los Angeles County). Developing nonpartisan public information that was savvy and "on-message," combined with community outreach strategies to inform residents about city needs, resulted in 70% support for retention of their utility users tax in April 2002. (With Fairbank, Maslin, Maullin & Associates [FMM&A] conducting baseline polling.) • City of La Habra (Orange County). Known as "ground zero" for the Jarvis Taxpayer's anti-tax movement, the City of La Habra lost a Supreme Court case, which subsequently set precedent for requiring voter affirmation of all utility users taxes. Our firm was called to lead the effort in conservative Orange County — brass tacks strategic advice and a savvy communications program on behalf of the City laid the groundwork for a successful election to maintain its utility users tax in March, 2002. (With FMM&A conducting baseline polling.) • San Jose/Evergreen Community College District (Santa Clara County). Our firm directed the San Jose/Evergreen District's successful effort to pass a $135 million bond for facilities repair in November, 1998 at a two-thirds requirement passage. • City of Clovis (Fresno County). LEG successfully directed a $15 million sales tax over- ride for a new public safety facility in November, 1999 at a two-thirds requirement level. This measure won by only 3 votes per precinct after paid, organized opposition surfaced late in the campaign in this conservative rural city. (With FMM&A conducting baseline polling.) • Saratoga Fire District (Fire District, Santa Clara County). LEG represented the Fire District in its successful one year; pre-election strategic services effort for a successful $6 million bond measure in April 2000. More than 1,300 constituents were organized to request that the Fire District proceed with a bond measure. We also managed the campaign for the successful bond measure following our service to the Fire District, which was successful at 86% support. • Friends of Saratoga Libraries (City of Saratoga, Santa Clara County). We represented a coalition of City, Library and citizens representatives conducting a feasibility and outreach program for a $14 million, two-thirds bond election in March 2000. More than 1,200 citizens endorsed or participated in the city's initial feasibility campaign, and we also managed the successful election campaign itself, which was successful. City representatives had tried for ten years to pass a library bond prior to their retention of our firm. (With FMM&A conducting baseline polling.) • City of San Leandro (Alameda County). We successfuhy represented the City in its effort to defeat the proposed repeal of its real estate transfer property tax, which would have cost the city millions of dollars per year. (With FMM&A conducting baseline polling.) Some of our many other clients include the President of the League of California Cities, Mr. John Russo; the cities of La Mesa, Big Bear Lake, West Hollywood, Visalia, Richmond, A-2 Exhibit A Belmont, Santa Cruz, and Millbrae; Palomar Community College District, Ventura County Community College District, Los Angeles Unified School District, Norwalk-La Mirada Unified School District, Coast Community College District (Orange County), Anaheim City School District, and the Santa Clara County Office of Education. Fairbank, Maslin, Maullin & Associates has a well-established record of conducting public opinion studies regarding financial measures to fund improvements and services for local jurisdictions and school districts. FMM&A, a California corporation, has specialized in public policy oriented opinion research since its establishment in 1981. FMM&A is the California leader in conducting research for government jurisdictions for the planning, development, implementation, and evaluation of public services and policy programs. FMM&A offers a full range of opinion research and communications strategy consulting services, including services designed to assess and support a revenue measure campaign. FMM&A's opinion research and marketing services include: • Random-digit-dial (RDD) and listed sample public opinion telephone surveys in English and Spanish • Public opinion mail surveys • In-depth executive interviews. • Focus groups • Product testing and consumer market research • Advertising testing using perception analyzer audience response technology FMM&A plans and executes all phases of focus group and survey research projects from beginning to end. On an annual basis; the company conducts as many as one hundred focus groups and three hundred surveys. We design the research instrument, specify the sampling or recruitment plan, manage the data gathering process, and analyze/interpret the data. FMM&A is also adept in the use of perception analyzer technology which bridges the gap between qualitative and quantitative opinion research. FMM&A's principal business is to provide timely public opinion analysis to assist policy makers in their decision-making. We are successful because our 18-person staff is multi-talented and works as a team to assure the completion of quality opinion analysis in a timely manner. FMM&A also has on-staff Spanish language capability which it can apply to research projects involving populations with significant Spanish speaking segments. Unique Challenees to the City of San Luis Obispo The passage of revenue measures—fees, taxes, bonds or assessments—are among the most difficult in the country to win. Even if a small opposition develops, naysayers can sink an A-3 ca I i Exhibit A effort. Often, a significant percentage of the vote may come with modest effort, but it is the last few percentage points that are the most difficult to obtain. Every election must be viewed with a fresh lens and a fresh perspective, particularly since the external and political environs have changed over the last several election cycles. Consider this: • In November 2002, there were more statewide finance measures on the ballot than ever before, including a statewide public education bond. Another statewide education bond is contemplated for 2004, as well as a Sales Tax increase. "Bond fatigue" may set in to the average person, particularly in cities like yours, which have fiscally conservative voters. • Consumer confidence is still low. Even with the conclusion of the war abroad, pundits are predicting that the economy will take some time to rebound. • Voter turnout has remained stagnant in many jurisdictions, actually dropping to historical lows in California in the March 2002 and November 2002 elections. At the same time, permanent absentee rolls have swelled. The combination of these two factors means that the average voter is older and more fiscally conservative than ever. Another potential challenge is as yet unknown, because you are still early in the planning process. Depending on the funding mechanism selected, the City may face potential opposition from certain sectors or industries (e.g., the business community, hotels, etc.). We would address these issues if and when they arise. Unique Opportunities Despite these challenges, you also have opportunities that present themselves as you initiate this early planning. • Recent evaluations we have conducted in a number of cities show that the state's fiscal crisis has affected the average voter,.raising awareness and concern about local funding needs. - • The use of credible messengers such as public safety, senior and parent stakeholders, and civic leaders to help promote your measure will help tremendously. Also, the fact that you are planning now is a key positive factor. In our experience, it is critical that your stakeholders and public be strategically involved on the "front-end," and not the "back-end." Some of the most successful jurisdictions are those that have established a "Citizens Task Force," carefully selected and deliberately implemented, during their planning efforts, as well as following successful passage of a revenue measure. A-4 CA (. Exhibit A Our proposal represents a comprehensive, well-planned initiative to assess, educate and prepare the public to understand your needs. As you know, by law, no public funding can be spent on campaign or partisan activities. However, within the appropriate bounds of the law, significant assessment and education of the public can be undertaken so that a high level of awareness is achieved by your consumers prior to the election itself. The City of San Luis Obispo has an opportunity to be very strategic in involving key community stakeholders early in the process. We would work closely with you to define effective messages and outreach techniques following the completion of your July research. Approach As your lead consultant, the Lew Edwards Group will develop the overall strategy, timeline, and management for your effort. We will review both the technical and outreach approaches below. The Lew Edwards Group will serve as the primary consultant, and following appropriate consultation with the City of San Luis Obispo, FMM&A will work with us to develop the public opinion research. Phase I of our engagement would determine the feasibility of a Finance Measure through public opinion polling and team assessment. Phase II would include the City- side public education effort, if our research shows potential for the City to move forward. We will review both the technical and outreach approaches below. Phase I: Feasibility Assessment In implementing the Phase I survey research component, LEG will work closely with team partner FMM&A to focus on the specific local issues, problems and opportunities that make this project unique. A survey instrument will.be drafted that addresses the City of San Luis Obispo's unique needs. We do not believe in "generic" research, so your questionnaire will be custom designed. Brainstorming sessions will be scheduled with city staff and attended by LEG and FMM&A to identify key issues. Our objective is to assist you in using the research findings to effectively develop and target potential opportunities, problems, themes and strategies in your pre-election process. We will survey hundreds of randomly selected San Luis Obispo voters who have a history of regular participation in even-year primary and general elections. The survey will be conducted by telephone and provide enough respondents to accurately assess opinions across demographic, geographic and socioeconomic subsets—such as ethnic, income, and neighborhood group—within the sample. The size of the sample and the length of the questionnaire will be designed to fit the City's budget, after team consultation about the City's projects and needs. A-5 �^ t Exhibit A The City's team enjoyed working in close consultation with us on the design of the survey questionnaire in 2000, and we welcome such participation. Several drafts of the survey will be developed, to ensure that we fully explore all the information desired now by the City. We will obtain the City's approval on the final version of the questionnaire. Once approved for fielding, the questionnaire will be pre-tested with a sufficient number of respondents to assure ease of administration and flow. Such testing will also verify the length of the questionnaire and the survey questions'clarity and comprehensibility. Well-established procedures are in place to supervise the interviewing process and to verify that interviews were conducted according to specifications. These procedures include the monitoring of actual interviews by on-site supervisors, coding each interview by interviewer through telephone monitoring equipment and the use of a regularly employed staff of professional, full time interviewers. There is an established protocol for callbacks of busy or "not-at-home" numbers designed specifically to maintain the randomness of interviewee selection. FMM&A will retain all interviews as part of its data processing procedures, and will review its procedures with the City staff to assure client satisfaction with all technical aspects of the sample selection and interviewing process. Response data will be processed in-house using FMM&A's custom designed statistical analysis program to report the tabulation and cross-tabulation of data. Up to 200 cross-tabulation banner points can be prepared, thus allowing the organization of information about attitudes, preferences and behavior according to respondent groupings (attitudinal, demographic, geographic, ideological, etc.) in numerous display formats. The analysis will uncover differences among various respondent subgroups and enable more detailed demographic analysis of residents' perceptions of the City and its services. Results of the surveys will be presented both in-person and in writing. The written report is user-friendly and will present key data in tabular and graphic form. The report's components include: an executive summary; a description of methodology; and a summary of results, findings, conclusions and recommendations highlighting areas for improvement in service delivery. Following the conclusion of the survey research, LEG will work with FMM&A in presenting to the City a detailed assessment of the implications of the poll, the City's options, and the feasibility of a successful finance measure in the form of a final report. Phase II: Public Information Program If proceeding with the Measure is recommended, LEG will work with you in designing a nonpartisan, information-only Public Information Program which is implemented prior to placement of your revenue measure on the ballot. Exhibit A This Public Information Program is designed to build additional awareness and support prior to your election. Because it is implemented prior to placement of a measure on the ballot, it is both legal and advisable for the City to work directly with community stakeholders on such a plan. The best plans are those developed in collaboration with you. However, in general, we will implement the following approach: As described above, it is lawful and appropriate for the District to engage in a Public Information Activities related to a finance measure, to inform and educate the public.about your needs. A comprehensive nonpartisan, City-side Public Information Program normally includes the following components/scope of services: Proiect List Refinement. LEG will evaluate survey results and work with the City's staff and financial experts to appropriately define and refine your Project List in the manner most effective with your public and your stakeholders. This includes close collaboration with your bond underwriter and/or financial advisor on the proper structuring of the measure, to ensure public support, not just technical efficiency. In addition, we will work closely with your bond counsel and/or city attorney to develop the ballot question and other related materials in the manner most effective with your public.. Development/ReFnement of Key Messages. Your pre-election, Public Information Program will be the most important method of educating the public and raising awareness to levels that ensure the success of a revenue measure. Your message should include all of the following elements: a. information about how well managed the City is; b. information about the specific public safety needs that the finance measure funds, including the specific benefit(s) for constituents; C. information about the reasonableness of the assessment in comparison to other cities of your size; and d. the fact that a variety of stakeholders worked with the City to refine the final proposal. Nearly as important as the message is who's saying it (the "messenger"). LEG strongly recommends and encourages you to think beyond the "standard" approach of issuing information strictly from the City: We will work with you to identify other "messengers," to feature in brochures or as speakers in community meetings or editorial board visits (e.g., leaders in the senior community, supportive civic/opinion leaders, business representatives, other stakeholders). These messengers will be identified in your polling. A Ga ^�3 Exhibit A Communications Plan: We recommend that a direct mail program be implemented. Typically these are user-friendly brochures or letters. Depending on the issue, they have a return card or other mechanism to allow citizens to ask questions, provide input, or otherwise comment on the city's proposal. This builds buy-in and support among your constituents, as well as giving LEG and your team information on potential problems or issues that must be addressed. As residents return the cards, they are coded onto a database. This allows the City to track the response of your constituents in the information-only phase of your effort. By using this type of direct mail, you can identify and address questions early in the process, rather than discovering them when it's too late. We also recommend placing stories in your local papers, and LEG will work with you to design an earned (nonpaid) media plan. Other communications vehicles include information on your city website, maximizing the use of community television, and PowerPoint presentations where needed. Community-Mediae Outreach Plan: Our firm has designed Speakers Bureau trainings, "town halls," and community meetings for participants as small as 25-50 and as large as several hundred. Following the completion of your survey research, LEG will design a comprehensive community outreach plan strategically directed to key stakeholders. Additional public opinion research: Following the public information program, the City should conduct another scientific public opinion survey—an abbreviated version also known as a "tracking poll"—just before placing the measure on the ballot. The purpose of this tracking poll is a final "litmus test" in ensuring that there is substantial voter approval at this point, and confirm financial thresholds: that the City is not asking for too little or too much money for the measure. Conducting a tracking poll close to the time that the City makes a final decision in going forward with a ballot measure is the final opportunity to evaluate where the electorate is, and to make adjustments in the measure as necessary—including not going forward at all. Proposed Fee for Services—March 04 Election The proposed fees below are the City's cost to retain the Lew Edwards Group's (LEG's) expertise on strategy, communications design, and the assessment services of FMM&A as a sub- consultant. These proposed fees are for strategic and polling services only; other project costs such as mailing data, postage, and printing are in addition to our professional fees. We are advising all of our municipal clients to seriously consider and preserve March 04 as an option, unless a poll shows that March 04 is unfeasible. Remember that while there is no ideal time to proceed, bond fatigue and voter cynicism could really set in by November 04 because it is a "two cycle" election year. In March 2004, there is a contested Democratic Presidential Primary, which typically increases turnout among younger voters and other demographic groups who are more receptive A-8 cqr 1`t' Exhibit A to a finance measure. These groups could stay home if the November presidential appears only to have momentum on the Republican side. The timeline described below allows enough time to plan for a March 2004 election, but only if planning is initiated now. Many of our other clients are planning for local March measures because the state's fiscal situation is so uncertain. We are finding that in other communities, voters have a high awareness of the state's problems and the need for local funding—and empathize with it. This important nuance/trend should be viewed as an opportunity. ProposedTimePine and Schedule for Deliverables fora March 2004 Election Phase I: Determining Feasibility(July-August) July lst, 2003: City executes contract with LEG Week of July 15`h Kick-off planning session with City, review needs/issues Week of July 20- Initial draft of surveyj comments and re-drafts exchanged Week of July 28`h: Final draft of survey approved Week of August 4`h' Pre-test of survey; survey conducted Week of August 11`h: Submit topline results Week of August 18"': Cross tabulation of data; team strategy meeting with City Week of August 25th: Submit final report to City on feasibility, City decides whether to proceed with Phase 11 The proposed professional fee for both strategic advice and public opinion assessment in Phase I is $37,500. Phase II: City-Side Public Information(September-December) September: Develop recommendations on funding projects and funding mechanism; conduct additional financial analysis as necessary; evaluate funding option; Submit written report detailing proposed messages, strategies, methods, timeline and budget for Fall Public Information Plan September–December Ongoing refinement of Expenditure Plan; City-side Public Education effort launches, including minimum of 3 pieces of direct mail, Speakers Bureau presentations, etc. November Conduct Tracking Poll December 2 City Council places Measure on Ballot Work transfers to Volunteer Committee for Partisan Campaign The proposed professional fee for designing and implementing a Public Information Program in preparation for a March 04 finance measure election is $32,500, which includes strategic advice and a tracking poll. However, additional hard project costs to educate and A-9 �� Exhibit A inform the public—such as mailing data, printing and postage—are in addition to professional fees. In closing, we want to thank the City of San Luis Obispo for its consideration of The Lew Edwards Group to continue to serve your needs. Few consultants can match the expertise of our firm in revenue measures, grassroots organizing, community involvement, strategic planning, and media/marketing services. A-10 Cq I lP Exhibit A Lew Edwards Group Selected References. Contact information directly provided. Jeff Witte,Deputy City Manager (successful two-thirds public safety measure) City of Clovis (559) 297-2326 Vanale Schock, City Manager(successful utility tax measure) City of Lawndale (310)973-3202 vschock@lawndalecity.org Sal.Failla,Director of Community Development (successful city utility tax measure) City of La Habra (562) 562-905-9709 sal failla@lahabracity.com Jim Stark,Assistant Superintendent,Business Services (successful local school measure) La Mesa—Spring Valley Unified School District (619) 668-5700 x 6392 iim.stark@lmsysd.kl 2.ca.us Thomas Fil Finance Director(successful city library measure) City of Belmont (650) 595-7435 tfil @ci.belmont.ca.us Ray Reynolds,Director of Economic-Development(successful finance measures) City of West Hollywood (323) 848-6464 rreynolds @ weho.oM Superintendent Sandra Barry (successful school measure, Orange County) Anaheim City School District (714) 517-7515 sbarry @.acsd.k 12.ca.us �a . ,�, Exhibit B CONTRACT PERFORMANCE TERMS 1. Business Tax. Contractor must have a valid City of San Luis Obispo business tax certificate prior to execution of the contract. Additional information regarding the City's business tax program may be obtained by calling (805)781-7134. 2. Ability to Perform. Contractor warrants that it possesses, or has arranged through subcontracts, all capital and other equipment, labor, materials, and licenses necessary to cavy out and complete the work hereunder in compliance with any and all federal, state, county, city, and special district laws,ordinances, and regulations. 3. Laws to be Observed. Contractor shall keep itself fully informed of and shall observe and comply with all applicable state and federal laws and county and City of San Luis Obispo ordinances, regulations and adopted codes during its performance of the work. 4. Payment of Taxes. The contract prices shall include full compensation for all taxes that Contractor is required to pay. 5. Permits and Licenses. Contractor shall procure all permits and licenses, pay all charges and fees,and give all notices necessary. 6. Safety Provisions. Contractor shall conform to the rules and regulations pertaining to safety established by OSHA and the California Division of Industrial Safety. 7. Public and Employee Safety. Whenever Contractor's operations create a condition hazardous to the public or City employees, it shall, at its expense and without cost to the City, furnish, erect and maintain such fences, temporary railings, barricades, lights, signs and other devices and take such other protective measures as are necessary to prevent accidents or damage or injury to the public and employees. 8. Preservation of City Property. Contractor shall provide and install suitable safeguards, approved by the City, to protect City property from injury or damage. If City property is injured or damaged as a result of Contractor's operations, it shall be replaced or restored at Contractor's expense. The facilities shall be replaced or restored to a condition as good as when the Contractor began work. 9. Immigration Act of 1986. Contractor warrants on behalf of itself and all sub-contractors engaged for the performance of this work that only persons authorized to work in the United States pursuant to the Immigration Reform and Control Act of 1986 and other applicable laws shall be employed in the performance of the work hereunder. 10. Contractor Non-Discrimination. In the performance of this work, Contractor agrees that it will not engage in, nor permit such sub-contractors as it may employ, to engage in discrimination in employment of persons because of age, race, color, sex, national origin or ancestry, sexual orientation, or religion of such persons. 11. Work Delays. Should Contractor be obstructed or delayed in the work required to be done hereunder by changes in the work or by any default, act, or omission of the City, or by strikes, fire, earthquake, or any other Act of God, or by the inability to obtain materials, equipment, or B-1 Exhibit B labor due to federal government restrictions arising out of defense or war programs, then the time of completion may, at the City's sole option, be extended for such periods as may be agreed upon by the City and the Contractor. 12. Payment Terms. The City's payment terms are 30 days from the receipt of an original invoice and acceptance by the City of the services provided by Contractor(Net 30). 13. Inspection. Contractor shall furnish City with every reasonable opportunity for City to ascertain that the services of Contractor are being performed in accordance with the requirements and intentions of this contract. All work done and all materials furnished, if any, shall be subject to the City's inspection and approval. The inspection of such work shall not relieve Contractor of any of its obligations to fulfill its contract requirements. 14. Audit. The City shall have the option of inspecting and/or auditing all records and other written materials used by Contractor in preparing its invoices to City as a condition precedent to any payment to Contractor. 15. Interests of Contractor. Contractor covenants that it presently has no interest, and shall not acquire any interest direct or indirect or otherwise, which would conflict in any manner or degree with the performance of the work hereunder. Contractor further covenants that, in the performance of this work, no sub-contractor or person having such an interest shall be employed. Contractor certifies that no one who has or will have any financial interest in performing this work is an officer or employee of the City. It is hereby expressly agreed that, in the performance of the work hereunder, Contractor shall at all times be deemed an independent contractor and not an agent or employee of the City. 16. Hold Harmless and Indemnification. Contractor agrees to defend, indemnify, protect and hold the City and its agents, officers and employees harmless from and against any and all claims asserted or liability established for damages or injuries to any person or property, including injury to Contractor's employees, agents or officers which arise from or are connected with or are caused or claimed to be caused by the acts or omissions of Contractor, and its agents, officers or employees, in performing the work or services herein, and all expenses of investigating and defending against same; provided, however, that Contractor's duty to indemnify and hold harmless shall not include any claims or liability arising from the established sole negligence or willful misconduct of the City; its agents, officers or employees. 17. Year 2000 Compliance. The Contractor warrants that the goods or services provided to the City, including those provided through subcontractors, are "Year 2000 compliant." For the purpose of this contract, "Year 2000 compliant" means that goods or services provided to the City will continue to fully function, fault-free, before, at and after the Year 2000, without interruption or human intervention; and if applicable, any data outside of the date range 1990-1999, including leap years, will be correctly processed in any level of computer hardware or software, including, but not limited to, microcode, firmware, application programs, files and data bases. This warranty supersedes all warranty disclaimers or limitations, and all limitations on liability, otherwise provided by the Contractor. Upon request by the City, the Contractor will provide the City with a description of its Year 2000 compliance strategy, or statement of why this is not relevant to contract performance. 13"Z r 01 Exhibit B 18. Contract Assignment. Contractor shall not assign, transfer, convey or otherwise dispose of the contract, or its right, title or interest, or its power to execute such a contract to any individual or business entity of any kind without the previous written consent of the City. 19. Termination. If, during the term of the contract, the City determines that Contractor is not faithfully abiding by any tern or condition contained herein, the City may notify Contractor in writing of such defect or failure to perform; which notice must give Contractor a 10 (ten)calendar day notice of time thereafter in which to perform said work or cure the deficiency. If Contractor has not performed the work or cured the deficiency within the ten days specified in the notice, such shall constitute a breach of the contract and the City may terminate the contract immediately by written notice to Contractor to said effect. Thereafter, neither party shall have any further duties,obligations, responsibilities or rights under the contract. In said event, Contractor shall be entitled to the reasonable value of its services performed from the beginning date in which the breach occurs up to the day it received the City's Notice of Termination, minus any offset from such payment representing the City's damages from such breach. "Reasonable value" includes fees or charges for goods or services as of the last milestone or task satisfactorily delivered or completed by Contractor as may be set forth in the Agreement payment schedule; compensation for any other work, services or goods performed or provided by Contractor shall be based solely on the City's assessment of the value of the work-in-progress in completing the overall workscope. The City reserves the right to delay any such payment until completion or confirmed abandonment of the project, as may be determined in the City's sole discretion, so as to permit a full and complete accounting of costs. In no event, however, shall Contractor be entitled to receive in excess of the compensation quoted in its proposal. 20. Ownership of Materials. All original drawings, plan documents and other materials prepared by or in possession of Contractor as part of the work or services under these specifications shall become the permanent property of the City, and shall be delivered to the City upon demand. 21. Release of Reports and.Information. Any reports, information,data, or other material given to, prepared by or assembled by Contractor as part of the work or services under these specifications shall be the property of City, and shall not be made available to any individual or organization by Contractor without the prior written approval of the City. 22. Copies of Reports and Information. If the City requests additional copies of reports, drawings, specifications, or any other material in addition to what Contractor is required to furnish in limited quantities as part of the work or services under these specifications, Contractor shall provide such additional copies as are requested, and City shall compensate Contractor for the costs of duplicating of such copies at the Contractor's direct expense. 23. Required Deliverable Products. Contractor will provide an electronic version of the final report that addresses all elements of the workscope. Any documents or materials provided by Contractor will be reviewed by City staff and, where necessary, Contractor will respond to staff comments and make such changes as deemed appropriate. Electronic documents must be compatible with the following programs: B-3 /-a ^ Ov Exhibit B • Word Processing Word • Spreadsheets Excel • Desktop Publishing Adobe Acrobat 24. Attendance at Meetings and Hearings. As part of the workscope and included in the contract price is attendance by the Contractor at up to two public meetings to present and discuss its findings and recommendations. Contractor shall attend as many "working" meetings with staff as necessary in performing workscope tasks. 25. Insurance. Contractor shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work hereunder by Contractor, its agents, representatives, employees or sub-contractors. a. Minimum scope of insurance. Coverage shall be at least as broad as: • Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001). • Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability,code 1 (any auto). • Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. • Errors and Omissions Liability insurance as appropriate to Contractor's profession. b. Minimum limits of insurance. Contractor shall maintain limits no less than: • General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this projectflocation or the general aggregate limit shall be twice the required occurrence limit. • Automobile Liability: $1,000,000 per accident for bodily injury and property damage. • Employer's Liability: $1,000,000 per accident for bodily injury or disease. • Errors and Omissions Liability: $1,000,000 per occurrence. C. Deductibles and self-insured retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self=insured retentions as respects the City, its officers, officials, employees and volunteers; or Contractor shall procure a bond guaranteeing payment of losses and.related investigations, claim administration and defense expenses. d. Other insurance provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions: • The City, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or B_4 L 1"1 ^d` Exhibit B on behalf of Contractor; products and completed operations of Contractor; premises owned, occupied or used by Contractor; or automobiles owned, leased, hired or borrowed by Contractor. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, official, employees, agents or volunteers. • For any claims related to this project, Contractor's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents or volunteers shall be excess of Contractor's insurance and shall not contribute with it. • Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, its officers, officials, employees, agents or volunteers. • Contractor's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. • Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days'prior written notice by certified mail,return receipt requested, has been given to the City. e. Acceptability of insurers. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than ANII. f. Verification of coverage. Contractor shall furnish the City with a certificate of insurance showing maintenance of the required insurance coverage. Original endorsements effecting general liability and automobile liability coverage required by this clause must also be provided. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before work commences. B-5 �`T o