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HomeMy WebLinkAbout11/17/1998, C6 - CAL POLY ANNEXATION FISCAL STUDY council Maag -/7-98 j acEnaa nEpont c� CITY OF SAN LUIS OBISPO FROM: Bill Statler,Director of Finance Oe SUBJECT: CAL POLY ANNEXATION FISCAL STUDY CAO RECOMMENDATION Approve a request for proposals (RFP) to evaluate the costs and benefits of annexing Cal Poly; and authorize the CAO to award the contract to the best overall proposer if within the project budget of$30,000. DISCUSSION Background As part of the Long-Term Fiscal Health major City goal in the 1997-99 Financial Plan, the Council approved $30,000 to evaluate the fiscal impacts of annexing Cal Poly (Attachment A). Additionally, the study will analyze the experience of other communities with a State university in its city limits as well as governance issues. No formal proposal has been made or is under consideration to annex Cal Poly to the City. This is simply a fact-finding effort Based on the results of this study, we may explore this idea further. Workscope Provided in Attachment B is the Workscope section of the RFP. In summary, the study will evaluate the following four issues: City Costs and Revenues ■ What City services would be affected by annexation? How will service costs change? ■ What revenue sources would be affected by annexation? How will revenues change? ■ How will existing service agreements be affected? Experience of Other Communities in California ■ What other cities have State universities within their city limits? ■ What has been their service delivery and governance experience? ■ Have any cities previously annexed an existing college campus? ■ If yes, what problems (if any) did they encounter during the annexation process, and have there been any subsequent fiscal or governance issues? Council Agenda Report-Cal Poly Annexation Fiscal Study Page 2 Governance Issues ■ What are the basic "authorities" that determine intergovernmental relationships between the City, County and Cal Poly? ■ What governance issues are likely to emerge for the City and Cal Poly? ■ What regulatory authority (if any) would the City have over Cal Poly? How is this different(if at all) from the County's existing regulatory authority? Fiscal Impacts on Cal Poly and the County ■ What are the likely fiscal impacts on Cal Poly and the County? As noted in the RFP workscope, while the City is the sole client for this work, we hope to work closely with Cal Poly and the County on this project. Proposal Evaluation and Selection Proposals will be evaluated by a review team (which we hope will include representatives from Cal Poly and the County)based on the following criteria: ■ Understanding of the work required by the City. ■ Quality, clarity and responsiveness of the proposal. ■ Demonstrated competence and professional qualifications necessary for successfully performing the work required by the City. ■ Recent experience in successfully performing similar services. ■ Proposed approach in completing the work. ■ References. ■ Background and related experience of the specific individuals to be assigned to this project. ■ Proposed compensation. As reflected above, contract award will not be based solely on price, but on a combination of factors representing the best overall proposal. Provided in Attachment C is a list of six firms that we know are highly capable of doing this work based on their area of expertise and the City's direct experience with them in the past on similar projects. Proposal Review and Award Schedule The following is an outline of the anticipated schedule for proposal review, contract award and completion of work: Cb - Z Council Agenda Report—Cal Poly Annexation Fiscal Study Page 3 ■ Issue RFP 11/18 ■ Conduct pre-proposal conference 12/7 ■ Receive proposals 12/21 ■ Complete proposal evaluation 1/7 ■ Conduct finalist interviews 1/11 ■ Finalize staff recommendation 1/18 ■ Award contract 1/21 ■ Execute contract 1/31 ■ Start work 2/1 ■ Complete administrative draft 3/25 ■ Coordinate review by City, Cal Poly and County staff 4/15 ■ Finalize findings and present to Council, others 5/18 As reflected above,we plan to complete this work and present its findings to the Council by May of 1999. FISCAL ITUPACT The 1997-99 Financial Plan includes funding in the amount of$30,000 to perform this study. ATTACHMENTS A. Long-term fiscal health major City goal from 1997-99 Financial Plan B. Workscope excerpt from RFP C. Proposers list ON FILE IN THE COUNCIL OFFICE RFP for evaluating the costs and benefits of annexing the Cal Poly—Specification No. 9210 G:Finance/RFP's and IFB's/Cal Poly Annexation/Agenda Report C6 - 3 Attachment A' POLICIES AND OBJECTIVES /t'i'fG= �•sc« st- ... may/ MAJOR CITY GOALS—LONG-TERM FISCAL HEALTH OBJECTIVE Protect the City's long-term fiscal health by maintaining a balanced budget, an adequate capital improvement plan,and an adequate unreserved fund balance. DISCUSSION Background Results of the five year fiscal forecast As part of the Council goal-setting process for 1997-99, a detailed five year forecast for the General Fund was prepared in order to assess the City's fiscal environment, and gain some initial insights on the "order of magnitude" difficulty we would likely experience in balancing the budget for 1997-99. In developing this forecast, staff prepared a preliminary "forecast CIP" that assumed reasonable progress over the next five years in achieving adopted infrastructure and facility improvement goals. This resulted in a General Fund CIP of about $3.9 million annually. Of this amount, about 45% ($1.8 million) was for maintaining existing infrastructure and facilities, and about 55% ($2.1 million) was for expanding, building or acquiring new infrastructure,facilities and equipment Three different scenarios based on varying capital improvement plan (CEP) assumptions were prepared in this forecast(all other assumptions for revenues, operating expendituresand debt service were the same under each scenario). Depending on the CIP assumptions, the annual revenue/expenditure gap ranged from $1.4 million annually under the modest CLP scenario (which funded the CIP at $2.8 million annually versus the "forecast CIP" of$3.9 million) to an essentially balanced budget under the very reduced CLP scenario (which funded the CIP at$1.4 million annually). While not formally evaluated as one of the three scenarios,funding the CIP at the "reasonable progress" level set forth in the forecast CIP would have resulted in an annual $2.5 million reveaue%xpenditure gap. Under the reduced CLP scenario—which finds maintenance of existing infrastructure at about$1.9 million per year—the annual revenuelexpenditure gap in the forecast was about. $500,000. For purposes of preparing the Preliminary Financial Plan,this was the"target"CIP.level selected by the Council. The Preliminary Financial Plan includes an average annual General Fund contribution of about $2.4 million. This approximates the "modest" CIP scenario presented in the forecast, but is still $1.0 million short of the "reasonable progress"level. Conclusions about our fiscal skuadom In reviewing the results of the 1995-97 Financial Plan, the recently prepared five year General Fund fiscal forecast,and the 1997-99 Preliminary Financial Plan,two things are clear. ■ The tough budget decisions made over the past six years have been essential in preserving the City's fiscal health. In comparing our financial condition today, we are on-track with the forecast projections made as part of the 1993-95 Financial Plan process. ■ Significant challenges continue to face us in finding the delivery of essential services and achieving our adopted CIP goals. This simply underscores the fact that fiscal health is not something we will ever achieve"once and for all"; bice our personal health,this requires an ongoing commitment to this goal. POLICIES AND OBJECTIVES MAJOR CITY GOALS—LONG-TERM FISCAL HEALTH Issues We Will Face in Achieving this Goal The City's short-term strategy for addressing the projected revenuelexpenditure gap of$500,000 for 1997-99 consists of the following four components: ■ Limiting operating cost increases and reviewing service levels for expenditure reduction opportunities. ■ Developing a capital improvement plan (CIP) that focuses on adequately maintains our existing infrastructure and facilities. ■ Considering new revenue opportunities as allowed under Proposition 218. ■ If needed,malting strategic use of fiord balance and temporarily taking it below policy levels, subject to preparing a definite plan for restoring this balance in the future. However,this strategy will not serve us well in the longer term if we want to maintain current service levels and achieve our already-adopted infrastructure and facility improvement goals. As noted above, fimdmg the CIP at the "reasonable" progress level results in a $1.0 million annual revenuelexpenditure gap, assuming no enhancements in current service levels or new CIP needs. As such, we need to identify and implement other strategies for preserving service levels, achieving CIP goals, and maintaining our fiscal health These might include: ■ organizational transformation. Making our organization more productive, and delivering current or higher levels of service for less. ■ Economic development Helping our economy perform better than our forecast projections. ■ Legislative advocacy. Getting back what was taken-away from us by the State. ■ Citizen supported revenue options. Developing revenue strategies for a possible November 1998 election. ACTION PLAN There are four proposed components to this action plan for fiscal health: ■ Increase organizational productivity. Staffing costs are the largest part of the City's budget, accounting for 75% of operating costs in the General Fund. As such, identifying and'implementing ways of improving organizational effectiveness and customer service on an ongoing basis is an essential component of any long-term fiscal health strategy. ■ Prepare a long-term funding strategy. The budget-balancing strategy outlined for 1997-99 will not resolve our long-term fimding issues if we want to at least maintain existing service levels and achieve our capital improvement goals. To do this, we need to prepare a longer-term fimding strategy that can achieve broad-based community support This will be especially true if new revenue options requiring voter approval are part of this strategy. One approach for doing this is to create a task force similar to that used in developing economic development, environmental protection and open space financing strategies. ■ Evaluate the costs and benefits of annexing Cal Poly. While Cal Poly is not in the City limits, its operations have a significant impact on the community. The City ah-eady provides Cal Poly with four POLICIES AND OBJECTIVES WOR CITY GOALS—LONG-TERM FISCAL HEALTH key municipal services: fire, water, sewer and transit; and we have a major investment on the Cal Poly campus in the performing arts center. Our partnerships and inter-relationships with Cal Poly are likely to increase over time,with the current proposal for sharing in the costs of developing a sports complex as the most recent example. As such, it is timely to ask ourselves in a comprehensive way what the costs and benefits would be if Cal Poly was a formal part of the City. In addition to evaluating the fiscal benefits to the City, this study would also look at the experience of other communities that have major universities within their city limits. It would also evaluate impacts on Cal Poly and the County, as their support will be needed if this is to occur. ■ Review and monitor the City's focal condition. Effective reporting and monitoring of the City's fiscal condition on an ongoing basis is an essential, fimdamental component of managing our finances and assuring our long-term fiscal h th Increase Organizational Productivity ■ Identify ways of strengthening an organizational culture that constantly asks what are 10/97 we doing and why, and continuously takes positive action to improve City operations, organizational productivity and customer service. ■ Develop and present program to the Council that reinforces and strengthens these 1/98 values on an organization-wide basis. ■ Begin program implementation;monitor progress. 4/98 L Formally review program results after one year, identify areas for improvement. 3/99 Prepare Long-Term Strategy for Focal Health ■ Develop and present approach and work program to the Council. 9/97 ■ Begin preparing long-term strategy. 11/97 ■ Present recommendations to the Council in time for a measure to be placed on the _-November 1998 ballot in the event that this is part of the proposed strategy. 4/98 /04"Evaluate Costs and Benefits of Annexing&Poly ■ Discuss proposed study with Cal Poly and County officials. 7/97 ■ Determine workscope;request proposals from qualified consultants. 10/97 \ ■ Select consultant;begin preparing study. 1/98 ■ Complete study; t findings to Council,Cal Poly,County and the community. 7/98 Review and Monitor our Fiscal Condition ■ Adopt the 1997-99 Financial Plan and begin implementing any specific budget-balancing expenditure or revenue programs set forth in it. 7/97 ■ If approved,begin implementing a new financial management system. 8/97 ■ Prepare,consider and adopt the 1997-98 mid-year budget review. 2/98 ■ Prepare,consider and adopt the 1998-99 Financial Plan Supplement. 7/98 ■ Prepare,consider and adopt the 1998-99 mid-year budget review. 2/99 Continue to provide on-line,up-to-date financial information to departmental staff. Ongoing Continue to issue timely and accurate monthly financial reports. Ongoing ■ Continue to issue comprehensive quarterly financial reports and status reports on achieving major City goals and CIP projects. Ongoing ■ Present reports to Council as needed on any major unanticipated fiscal issues. As needed POUCIES AND OBJECTIVES MAJOR CITY GOALS—LONG-TERM FISCAL HEALTH RESPONSIBLE DEPARTMENTS All departments play a critically important role in ensuring the City's long-term fiscal health through their management and use of City resources; however, Administration, Personnel and Finance will be especially imiolved in achieving this goal. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Organizational Productivity . Two new activities are recommended in pursuit of this objective: ■ Organization-wide training. Department program training budgets are typically oriented towards the technical aspects of the department's mission; there are currently no funds set-aside for training on organization-wide goals of improving organizational effectiveness, productivity and customer service. Implementing a training program focused on City values and productivity improvement goals is estimated to cost$25,000 annually. ■ Tuition reimbursement. This program would assist employees in improving their skill levels on their own time. A modest investment of$13,900 annually in this program is recommended. Long-Term Fiscal Health Strategy While this will require a major commitment of existing staff resources,no additional fimdmg is required for this w ort. Study of Cal Poly Annexation Costs and Benefits Consultant assistance is recommended in completing this work at an estimated cost of $30,000. Itechnmcal he tant will have the lead responsibility for performing this work, there will still be a major comof staff time in managing the project, reviewing the consultant's work, and in presenting the resultsy- makers. Consultant assistance is proposed for two reasons: ■ Timing and workloads. Much of this work is planned to be completed at the same time asg- term fiscal health"project It will not be possible for City staff to directly work on both of thee a quality work product,and adequately deliver day-today services at the same time. ■ Third party credibility. Even if the staff could find the time to do this work, we believe thill benefit from an independent, third party performing this work While this is within thcalcapabilities of the staff, it will be important for there to be the highest levels of credibilityhe is are presented to Cal Poly,the County and the community. Review and Monitoring o the City's cal Condition ■ Operating program costs. Significant staff resources are currently allocated throughout the organization in ensuring the City's fiscal health on an ongoing basis. Other than these existing resources, no specific increases in regular staffing are anticipated over the next two years for this purpose; however, significant efforts will be made by Administration and Finance staff in reviewing budgets and monitoring their status. c6 - 7 POLICIES AND OBJECTIVES MAJOR CITY GOALS—LONG-TERM FISCAL HEALTH ■ C'IP costs. The information technology master plan identifies improving the City's financial management information system as one of its highest priorities. During 1996-97,funding for this project was transferred to the public safety system, which was short on funding and rated as an even higher priority. Implementing a financial system that will help us better manage our fiscal operations and address critical`year 2000",payroll and system integration problems will cost$460,000. OUTCOME-FINAL WORK PRODUCT Strategies,programs and systems for assuring our long-term fiscal health in accomplishing important community goals. C6 - $ Attachment Section A DESCRIPTION OF WORK PURPOSE The City of San Luis Obispo wants to contract with a qualified firm to evaluate the potential costs and benefits of annexing the California Polytechnic State University, San Luis Obispo (Cal Poly). No formal proposal has been made to do this;this is simply a fact-finding effort. Based on the results of this study,we may explore this idea further. BACKGROUND While Cal Poly is not in the City limits, it is immediately adjacent to the City, and its operations provide significant benefits as well as impacts on the community. Historically, there has been a close correlation between Cal Poly's growth,and the City's growth. In addition to many informal partnerships and liaison committees, the City has several formal service relationships with Cal Poly,including: ■ Water supply. Along with the California Men's Colony (CMC), the City and Cal Poly are members of the Whale Rock Reservoir Commission,a joint powers authority that owns and operates the Whale Rock Reservoir. The 40,000 acre foot reservoir was completed in 1960 in order to meet help meet the water supply needs of its members. The City owns 55%of the reservoir,Cal Poly 34%,and CMC 11%. ■ Water treatment and distribution. The City treats and distributes Cal Poly's domestic water needs. Cal Poly has an equity interest of 8.93% in the City's water treatment plant. This equity contribution, combined with their ownership of their water supply, results in a lower rate structure for Cal Poly than other City customers. For 1997-98, Cal Poly will pay about$323,000 for this service. ■ Wastewater collection and reclamation. The City collects and treats Cal Poly's wastewater. Cal Poly has an equity interest of 924% in the City's water reclamation plant, and 7% in the City's relief sewer main. This equity contribution results in a lower rate structure for Cal Poly than other City customers. For 1997-98, Cal Poly will pay about $307,000 for this service. ■ Fire protection. For an annual fee ($105,600 in 1997-98), the City provides fire suppression services to Cal Poly. ■ Transit. The City provides transit service to the Cal Poly campus. Through a cooperative agreement, Cal Poly pays an annual fee to the City based on its proportionate share of ridership($169,000 in 1997-98), and in tum provides free bus service to its students. ■ Performing arts center. The City, Cal Poly and a private, non-profit community group(the Foundation for the Performing Arts)have entered into a unique partnership to plan, design,build and operate a world-class -1- C6 - 9 Description of Work performing arts center on the Cal Poly campus. This partnership exists for the benefit Cal Poly's educational programs and the community's enjoyment of the performing arts. Under this partnership, Cal Poly donated the land and paid two-thirds of the construction costs, with the City and the Foundation each contributing one-sixth of the construction costs. All building operation and maintenance costs are paid by Cal Poly, while the City and the Foundation are responsible for any net operating losses. The $35 million center has been in operation for a little over one year, and attendance has far exceeded initial estimates. A recent analysis by UCSB shows that the center has resulted in significant economic benefits for local businesses,the County and the City. Our partnerships and inter-relationships with Cal Poly are likely to increase over time, with a proposal for a Cal Poly business research park as the most recent example. As such,it is timely to ask in a comprehensive way what the costs and benefits would be if Cal Poly was a formal part of the City. Additionally, we want to look at the experience of other communities that have major State universities within their city limits. We also want to consider the fiscal and governance impacts on Cal Poly and the County, as we would like their support if the results of the study show that annexing Cal Poly would be fiscally desirable for the City. WORKSCOPE Approach The City is contracting for this work, and will be the only client for the engagement. However, we want to work collaboratively with Cal Poly and the County on this project. Representatives from Cal Poly and the County will assist in the selection process,and they will participate in the project. Tasks City costs and revenues ■ What City services would be affected by annexation? How will service costs change? ■ What revenue sources would be affected by annexation? How will revenues change? ■ How will existing service agreements be affected? Experience of other communities in California ■ What other cities have State Universities within their city limits? ■ What has been their service delivery and governance experience? ■ Have any cities previously annexed an existing college campus? -2- - Description of Work ■ If yes, what problems (if any) did they encounter during the annexation process, and have there been any subsequent fiscal or governance issues? Governance issues ■ What are the basic "authorities" that determine intergovernmental relationships between the City,County and Cal Poly? ■ What governance issues are likely to emerge for the City and Cal Poly? ■ What regulatory authority (if any) would the City have over Cal Poly? How is this different (if at all) from the County's existing regulatory authority? Fiscal impacts on Cal Poly and the County ■ What are the likely fiscal impacts on Cal Poly and the County? BUDGET The City has budgeted$30,000 for this work. TIMEFRAME The City would like to complete this project within 90 days after contract execution. -3 Attachment PROPOSERS LIST Specification No. 9210 EVALUATION OF THE COSTS AND BENEFITS OF ANNEXING CAL POLY David Taussig&Associates Kotin Mouchly Group Susan Goodwin Alan Kotin 425 University Avenue, Suite 110 12100 Wilshire Boulevard Sacramento,CA 95825 Los Angeles,CA 90025 Phone No: (916)920.1109 Phone No. (310) 820-1703 Fax No: (916)920.4134 Fax No. (310) 850-1703 Economic Research Associates Mundie&Associates Bill Andersen Roberta Mundie 964 Fifth Avenue, Suite 214 3452 Sacramento Street San Diego,CA 92101 San Francisco,CA 94118 Phone No. (619)544-1402 Phone No. (415)441-9640 Fax No. (619)5441404 Fax No. (415)441-6983 David M.Griffith&Associates Crawford,Multari&Clark Associates Erin Payton Mike Multari 4320 Auburn Boulevard, Suite 2000 641 Higuera Street Sacramento,CA 95841 San Luis Obispo,CA 93401 Phone No. (916)485-8102 Phone No. (805) 541-3848 Fax No. (916)485-0111 Fax No. (805) 541-5512 C6 -/2 /111?Ai e6 Request for Proposals EVALUATION OF THE COSTS AND BENEFITS OF ANNEXING CAL POLY November 18, 1998 ►�►►����������� ���i ��� City of s A n WIS o B l s o IIIlillllllll IIII`I I city or san LUIS OBISPO 990 Palm Street ■ San Luis Obispo,CA 93401 Notice Requesting Proposals for EVALUATION OF THE COSTS AND BENEFITS OF ANNEJIING CAL POLY The City of San Luis Obispo is requesting sealed proposals for evaluating the costs and benefits of annexing the Cal Poly campus pursuant to Specification No. 9210. All proposals must be received by the Department of Finance by 3:00 PM, Monday, December 21, 1998, when they will be opened publicly in the City Hall Council Chambers,990 Palm Street, San Luis Obispo,CA 93401. Proposals received after said time will not be considered. To guard against premature opening, each proposal shall be submitted to the Department of Finance in a sealed envelope plainly marked with the proposal title, specification number, proposer name, and time and date of the proposal opening. Proposals shall be submitted using the forms provided in the specification package. A pre-proposal conference will be held at City Hall, Council Hearing Room, 990 Palm Street on Monday, December 7, 1998, at 10:30 AM to answer any questions that the prospective proposers may have regarding the City's request for proposals. Specification packages and additional information may be obtained by contacting Bill Statler,Director of Finance at(805)781-7125. ® The City of San Luis Obispo is committed to including disabled persons in all of our services,programs and activities. Telecommunloabons Device for the Deaf(805)781-7410. Specification No. 9210 TABLE OF CONTENTS A. Description of Work 1 Purpose Background Workscope Timeframe for Completing Work B. General Terms and Conditions 3 Proposal Requirements Contract Award and Execution Contract Performance C. Special Terms and Conditions 7 Proposal Content and Evaluation Process Proposal Content Proposal Evaluation and Selection Proposal Review and Award Schedule Pre-Proposal Conference Ownership and Release of Information Ownership of Materials Release of Reports and Information Copies of Reports and Information Work Product Required Deliverables Attendance at Meetings and Hearings D. Form of Agreement 10 E. Insurance Requirements 12 F. Proposal Submittal Forms 14 Proposal Submittal Summary References Section A DESCRIPTION OF WORK PURPOSE The City of San Luis Obispo wants to contract with a qualified firm to evaluate the potential costs and benefits of annexing the California Polytechnic State University, San Luis Obispo (Cal Poly). No formal proposal has been made to do this; this is simply a fact-fording effort. Based on the results of this study,we may explore this idea further. BACKGROUND While Cal Poly is not in the City limits, it is immediately adjacent to the City, and its operations provide significant benefits as well as impacts on the community. Historically, there has been a close correlation between Cal Poly's growth,and the City's growth. In addition to many informal partnerships and liaison committees, the City has several formal service relationships with Cal Poly, including: ■ Water supply. Along with the California Men's Colony (CMC), the City and Cal Poly are members of the Whale Rock Reservoir Commission, a joint powers authority that owns and operates the Whale Rock Reservoir. The 40,000 acre foot reservoir was completed in 1960 in order to meet help meet the water supply needs of its members. The City owns 55%of the reservoir,Cal Poly 34%,and CMC 11%. . ■ Water treatment and distribution. The City treats and distributes Cal Poly's domestic water needs. Cal Poly has an equity interest of 8.93% in the City's water treatment plant. This equity contribution, combined with their ownership of their water supply, results in a lower rate structure for Cal Poly than other City customers. For 1997-98, Cal Poly will pay about$323,000 for this service. ■ Wastewater collection and reclamation. The City collects and treats Cal Poly's wastewater. Cal Poly has an equity interest of 9.24% in the City's water reclamation plant, and 7% in the City's relief sewer main. This equity contribution results in a lower rate structure for Cal Poly than other City customers. For 1997-98, Cal Poly will pay about $307,000 for this service. ■ Fire protection. For an annual fee ($105,600 in 1997-98), the City provides fire suppression services to Cal Poly. ■ Transit. The City provides transit service to the Cal Poly campus. Through a cooperative agreement, Cal Poly pays an annual fee to the City based on its proportionate share of ridership($169,000 in 1997-98), and in tum provides free bus service to its students. ■ Performing arts center. The City, Cal Poly and a private, non-profit community group(the Foundation for the Performing Arts)have entered into a unique partnership to plan, design,build and operate a world-class 1 Description of Work performing arts center on the Cal Poly campus. This partnership exists for the benefit Cal Poly's educational programs and the community's enjoyment of the performing arts. Under this partnership, Cal Poly donated the land and paid two-thirds of the construction costs, with the City and the Foundation each contributing one-sixth of the construction costs. All building operation and maintenance costs are paid by Cal Poly, while the City and the Foundation are responsible for any net operating losses. The $35 million center has been in operation for a little over one year, and attendance has far exceeded initial estimates. A recent analysis by UCSB shows that the center has resulted in significant economic benefits for local businesses,the County and the City. Our partnerships and inter-relationships with Cal Poly are likely to increase over time, with a proposal for a Cal Poly business research park as the most recent example. As such, it is timely to ask in a comprehensive way what the costs and benefits would be if Cal Poly was a formal part of the City. Additionally, we want to look at the experience of other communities that have major State universities within their city limits. We also want to consider the fiscal and governance impacts on Cal Poly and the County, as we would like their support if the results of the study show that annexing Cal Poly would be fiscally desirable for the City. WORKSCOPE Approach The City is contracting for this work, and will be the only client for the engagement. However, we want to work collaboratively with Cal Poly and the County on this project. Representatives from Cal Poly and the County will assist in the selection process,and they will participate in the project. Tasks City costs and revenues ■ What City services would be affected by annexation? How will service costs change? ■ What revenue sources would be affected by annexation? How will revenues change? ■ How will existing service agreements be affected? Experience of other communities in California ■ What other cities have State Universities within their city limits? ■ What has been their service delivery and governance experience? ■ Have any cities previously annexed an existing college campus? -2- Description of Work ■ If yes, what problems (if any) did they encounter during the annexation process, and have there been any subsequent fiscal or governance issues? Governance issues ■ What are the basic "authorities" that determine intergovernmental relationships between the City,County and Cal Poly? ■ What governance issues are likely to emerge for the City and Cal Poly? ■ What regulatory authority (if any) would the City have over Cal Poly? How is this different (if at all) from the County's existing regulatory authority? Fiscal impacts on Cal Poly and the County ■ What are the likely fiscal impacts on Cal Poly and the County? BUDGET The City has budgeted$30,000 for this work. TEWEFRAME The City would like to complete this project within 90 days after contract execution. -3- Section B GENERAL TERMS AND CONDITIONS PROPOSAL REQUIREMENTS 1. Requirement to Meet All Provisions. Each individual or firm submitting a proposal (proposer) shall meet all of the terms, and conditions of the Request for Proposals (RFP) specifications package. By virtue of its proposal submittal, the proposer acknowledges agreement with and acceptance of all provisions of the RFP specifications. 2. Proposal Submittal. Each proposal must be submitted on the form(s) provided in the specifications and accompanied by any other required submittals or supplemental materials. Proposal documents shall be enclosed in an envelope which shall be sealed and addressed to the Department of Finance, City of San Luis Obispo, 990 Palm Street, San Luis Obispo, CA, 93401. In order to guard against premature opening, the proposal should be clearly labeled with the proposal title, specification number, name of proposer, and date and time of proposal opening. No FAX submittals will be accepted. 3. Insurance Certificate. Each proposal must include a certificate of insurance showing: a. The insurance carrier and its A.M. Best rating. b. Scope of coverage and limits. C. Deductibles and self-insured retention. The purpose of this submittal is to generally assess the adequacy of the proposer's insurance coverage during proposal evaluation; as discussed under paragraph 12 below, endorsements are not required until contract award. The City's insurance requirements are detailed in Section E. 4. Proposal Quotes and Unit Price Extensions. The extensions of unit prices for the quantities indicated and the lump sum prices quoted by the proposer must be entered in figures in the spaces provided on the Proposal Submittal Form(s). Any lump sum bid shall be stated in figures. The Proposal Submittal Form(s)must be totally completed. If the unit price and the total amount stated by any proposer for any item are not in agreement, the unit price alone will be considered as representing the proposer's intention and the proposal total will be corrected to conform to the specified unit price. 5. Proposal Withdrawal and Opening. A proposer may withdraw its proposal, without prejudice prior to the time specified for the proposal opening, by submitting a written request to the Director of Finance for its withdrawal, in which event the proposal will be returned to the proposer unopened. No proposal received after the time specified or at any place other than that stated in the "Notice Inviting Bids/Requesting Proposals" will be considered. All proposals will be opened and declared publicly. Proposers or their representatives are invited to be present at the opening of the proposals. 6. Submittal of One Proposal Only. No individual or business entity of any kind shall be allowed to make or file, or to be interested in more than one proposal, except an alternative proposal when specifically requested; however, an individual or business entity which has submitted a sub-proposal to a proposer submitting a proposal, or who has quoted prices on materials to such proposer, is not thereby disqualified from submitting a sub-proposal or from quoting prices to other proposers submitting proposals. -4- 7. Cooperative Purchasing. During the term of the contract, the successful proposer will extend all terms and conditions to any other local governmental agencies upon their request. These agencies will issue their own purchase orders, will directly receive goods or services at their place of business,and will be directly billed by the successful proposer. 8. Communications. All timely requests for information submitted in writing will receive a written response from the City. Telephone communications with City staff are not encouraged, but will be permitted. However,any such oral communication shall not be binding on the City. CONTRACT AWARD AND EXECUTION 9. Proposal Retention and Award. The City reserves the right to retain all proposals for a period of 60 days for examination and comparison. The City also reserves the right to waive non-substantial irregularities in any proposal,to reject any or all proposals,to reject or delete one part of a proposal and accept the other, except to the extent that proposals are qualified by specific limitations. See the "special terms and conditions" in Section C of these specifications for proposal evaluation and contract award criteria. 10. Competency and Responsibility of Proposer. The City reserves full discretion to determine the competence and responsibility, professionally and/or financially, of proposers. Proposers will provide, in a timely manner, any and all information which the City deems necessary to make such a decision. 11. Contract Requirement. The proposer to whom award is made (Contractor) shall execute a written contract with the City within ten (10) calendar days after notice of the award has been sent by mail to it at the address given in its proposal. The contract shall be made in the form adopted by the City and incorporated in these specifications. 12. Insurance Requirements. The Contractor shall provide proof of insurance in the form, coverages, and amounts specified in Section E of these specifications within 10 (ten) calendar days after notice of contract award as a precondition to contract execution. 13. Business Tax. The 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. CONTRACT PERFORMANCE 14. Ability to Perform. The 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. 15. Laws to be Observed. The 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. 16. Payment of Taxes. The contract prices shall include full compensation for all taxes which the Contractor is required to pay. 17. Permits and Licenses. The Contractor shall procure all permits and licenses, pay all charges and fees,and give all notices necessary. -5- 18. Safety Provisions. The Contractor shall conform to the rules and regulations pertaining to safety established by OSHA and the California Division of Industrial Safety. 19. Public and Employee Safety. Whenever the 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. 20. Preservation of City Property. The 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 the Contractor's operations, it shall be replaced or restored at the Contractor's expense. The facilities shall be replaced or restored to a condition as good as when the Contractor began work. 21. Immigration Act of 1986. The Contractor warrants on behalf of itself and all subcontractors 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. 22. Contractor Non-Discrimination. In the performance of this work, the Contractor agrees that it will not engage in,nor permit such subcontractors 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. 23. Work Delays. Should the 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 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. In the event that there is insufficient time to grant such extensions prior to the completion date of the contract,the City may, at the time of acceptance of the work, waive liquidated damages which may have accrued for failure to complete on time, due to any of the above, after hearing evidence as to the reasons for such delay, and making a finding as to the causes of same. 24. Payment Terms. The City's payment terms are 30 days from the receipt of an original invoice and acceptance by the City of the materials, supplies, equipment, or services provided by the Contractor(Net 30). 25. Inspection. The Contractor shall furnish City with every reasonable opportunity for City to ascertain that the services of the 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. 26. 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. -6- 27. Interests of Contractor. The 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.The Contractor further covenants that, in the performance of this work,no subcontractor or person having such an interest shall be employed. The 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,the Contractor shall at all times be deemed an independent contractor and not an agent or employee of the City. 28. Hold Harmless and Indemnification. The 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 the 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 the 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 the 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. 29. Contract Assignment. The 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. 30. Termination. If, during the term of the contract, the City determines that the Contractor is not faithfully abiding by any term or condition contained herein, the City may notify the Contractor in writing of such defect or failure to perform; which notice must give the Contractor a 10 (ten) calendar day notice of time thereafter in which to perform said work or cure the deficiency. If the 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 the Contractor to said effect. Thereafter, neither party shall have any further duties, obligations, responsibilities, or rights under the contract except, however, any and all obligations of the Contractor's surety shall remain in full force and effect, and shall not be extinguished, reduced, or in any manner waived by the termination thereof. In said event, the 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 the Contractor as may be set forth in the Agreement payment schedule; compensation for any other work, services or goods performed or provided by the 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 the Contractor be entitled to receive in excess of the compensation quoted in its proposal. -7- Section C SPECIAL TERMS AND CONDITIONS 1. Proposal Content. Your proposal must include the following information: Submittal Forms a. Proposal submittal summary. b. Certificate of insurance. C. References from at least three firms for whom you have provided similar services. Qualifications d. Experience of your firm in performing similar services. e. Resumes of the individuals who would be assigned to this project, including any sub- consultants. Rork Program f. Description of your approach to completing the work. g. Tentative schedule by phase and task for completing the work. h. Estimated hours for your staff in performing each major phase of the work, including sub-consultants. i. Services or data to be provided by the City. j. Any other information that would assist us in making this contract award decision. Compensation k. Proposed compensation and payment schedule tied to accomplishing key tasks. Proposal Length and Copies 1. Proposals should not exceed 10 pages, including attachments and supplemental materials. In. Seven copies of the proposal must be submitted. 2. Proposal Evaluation and Selection. Proposals will be evaluated by a review committee composed of representatives of the City, Cal Poly and County based on the following criteria: a. Understanding of the work required by the City. b. Quality,clarity and responsiveness of the proposal. C. Demonstrated competence and professional qualifications necessary for successfully performing the work required by the City. d. Recent experience in successfully performing similar services. e. Proposed approach in completing the work. f. References. g. Background and related experience of the specific individuals to be assigned to this project. h. Proposed compensation. -8- As reflected above, contract award will not be based solely on price, but on a combination of factors as determined to be in the best interest of the City. After evaluating the proposals and discussing them fiuther with the finalists or the tentatively selected contractor, the City reserves the right to further negotiate the proposed work and/or method and amount of compensation. 3. Proposal Review and Award Schedule. The following is an outline of the anticipated schedule for proposal review and contract award: a. Issue RFP 11/18 b. Conduct pre-proposal conference 12/7 C. Receive proposals 12/21 d. Complete proposal evaluation 1/7 e. Conduct finalist interviews(reserve this date) 1/11 f. Finalize staff recommendation 1/18 g. Award contract 1/21 h. Execute contract 1/31 i. Start work 2/1 j. Complete administrative draft 3/25 k. Coordinate review by City,Cal Poly and County staff 4/15 1. Finalize findings and present to Council,others 5/18 1. Pre-Proposal Conference. A pre-proposal conference will be held at the following location, date,and time to answer any questions that prospective proposers may have regarding this RFP: Monday, December 7, 1998 10:30 AM City Hall, Council Hearing Room 990 Palm Street, San Luis Obispo 2. Ownership of Materials. All original drawings, plan documents and other materials prepared by or in possession of the 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. 3. Release of Reports and Information. Any reports, information, data, or other material given to, prepared by or assembled by the 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 the Contractor without the prior written approval of the City. 4. Copies of Reports and Information. If the City requests additional copies of reports, drawings, specifications, or any other material in addition to what the Contractor is required to furnish in limited quantities as part of the work or services under these specifications, the Contractor shall provide such additional copies as are requested, and City shall compensate the Contractor for the costs of duplicating of such copies at the Contractor's direct expense. 5. Required Deliverable Products. The Contractor will be required to provide: a. Twenty five copies of the final report which addresses all elements of the workscope. Any documents or materials provided by the Contractor will be reviewed by City staff and, where necessary, the Contractor will be required to respond to staff comments and make such changes as deemed appropriate. b. One camera-ready original, unbound, each page printed on only one side, including any original graphics in place and scaled to size,ready for reproduction. -9- C. When computers have been used to produce materials submitted to the City as a part of the workscope,the Contractor must provide the corresponding computer files to the City, compatible with the following programs whenever possible unless otherwise directed by the project manager: • Word Processing Word • Spreadsheets Excel • Desktop Publishing Coreldraw,Pagemaker • Computer Aided Drafting(CAD) AutoCad Computer files must be on 31/2', high-density, write-protected diskettes, formatted for use on IBM-compatible systems. Each diskette must be clearly labeled and have a printed copy of the directory. 6. Attendance at Meetings and Hearings. As part of the workscope and included in the contract price is attendance at up to two public meetings to present and discuss the Contractor's findings and recommendations. Contractor shall attend as many "working" meetings with staff as necessary in performing workscope tasks. -10- Section D FORM OF AGREEMENT AGREEMENT THIS AGREEMENT is made and entered into in the City of San Luis Obispo on this day of , by and between the CITY OF SAN LUIS OBISPO, a municipal corporation,hereinafter referred to as City,and[ ],hereinafter referred to as Contractor. WITNESSETH: WHEREAS, on June 3, 1998, City requested proposals for an evaluation for the cost and benefits of annexing Cal Poly per Specification No.9210. WHEREAS,pursuant to said request,Contractor submitted a proposal which was accepted by City for said services. 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 of this Agreement is made and entered,as fust written above,until acceptance or completion of said services. 2. INCORPORATION BY REFERENCE. City Specification No. 9210 and Contractor's proposal dated June 30, 1998 are hereby incorporated in and made a part of this Agreement. 3. 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$ .00. 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 do everything required by this Agreement and the said specification. 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. -II- 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. 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 [ ] [ ] [ ] 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: City Clerk City Administrative Officer APPROVED AS TO FORM: CONTRACTOR By: City Attorney -12- Section E INSURANCE REQUIREMENTS: Consultant Services The Contractor shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Contractor,its agents,representatives,employees, or subcontractors. Minimum Scope of Insurance. Coverage shall be at least as broad as: 1. Insurance Services Office Commercial General Liability coverage(occurrence form CG 0001). 2. Insurance Services Office form number CA 0001 (Ed. 1/87)covering Automobile Liability,code 1 (any auto). 3. Workers'Compensation insurance as required by the State of California and Employer's Liability Insurance. 4. Errors and Omissions Liability insurance as appropriate to the consultant's profession. Minimum Limits of Insurance. Contractor shall maintain limits no less than: 1. 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 project/location or the general aggregate limit shall be twice the required occurrence limit. 2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage. 3. Employer's Liability: $1,000,000 per accident for bodily injury or disease. 4. Errors and Omissions Liability: $1,000,000 per occurrence. 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 the Contractor shall procure a bond guaranteeing payment of losses and related investigations,claim administration and defense expenses. Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain,the following provisions: 1. 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 on behalf of the Contractor, products and completed operations of the Contractor; premises owned, occupied or used by the Contractor, or automobiles owned, leased, hired or borrowed by the Contractor. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, official,employees, agents or volunteers. 2. For any claims related to this project, the 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 the Contractor's insurance and shall not contribute with it. 3. 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. 4. The 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. -13- r E , 5. 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. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than ANLL 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. -14- PROPOSAL SUBMITTAL SUMMARY The undersigned declares that she or he has carefully examined Specification No. 9210, which is hereby made a part of this proposal; is thoroughly familiar with its contents; is authorized to represent the proposing firm; and agrees to perform the specified work for the following cost quoted in full: Evaluation of the Costs and Benefits of Annexing Cal Poly $ ❑ Certificate of insurance attached; insurance company's A.M. Best rating: Rrm Name and Address Contact Phone Si azure o Authorized Representative Date -15- REFERENCES Number of years engaged in providing the services included within the scope of the specifications under the present business name: Describe fully the last three contracts performed by your firm which demonstrate your ability to provide the services included with the scope of the specifications. Attach additional pages if required. The City reserves the right to contact each of the references listed for additional information regarding your firm's qualifications. Reference No. l Customer Name Contact Individual Telephone&FAX number Street Address City, State,Zip Code Description of services provided including contract amount,when provided and project outcome Reference No. 2 Customer Name Contact Individual Telephone&FAX number Street Address City,State,Zip Code Description of services provided including contract amount,when provided and project outcome Reference No.3 Customer Name Contact Individual Telephone&FAX number Street Address City,State,Zip Code Description of services provided including contract amount,when provided and project outcome -16- PROPOSERS LIST Specification No. 9210 EVALUATION OF THE COSTS AND BENEFITS OF ANNEXING CAL POLY David Taussig&Associates Kotin Mouchly Group Susan Goodwin Alan Kotin 425 University Avenue, Suite 110 12100 Wilshire Boulevard Sacramento,CA 95825 Los Angeles,CA 90025 Phone No: (916)920.1109 Phone No. (310) 820-1703 Fax No: (916)920.4134 Fax No. (310) 850-1703 Economic Research Associates Mundie&Associates Bill Andersen Roberta Mundie 964 Fifth Avenue, Suite 214 3452 Sacramento Street San Diego,CA 92101 San Francisco,CA 94118 Phone No. (619)5441402 Phone No. (415)441-9640 Fax No. (619)5441404 Fax No. (415)441-6983 David M. Griffith&Associates Crawford,Multari&Clark Associates Erin Payton Mike Multari 4320 Auburn Boulevard, Suite 2000 641 Higuera Street Sacramento,CA 95841 San Luis Obispo,CA 93401 Phone No. (916)485-8102 Phone No. (805) 541-3848 Fax No. (916)485-0111 Fax No. (805) 541-5512