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RPVCCA_CC_SR_2015_06_02_G_Storm_Drain_User_Fee_Rate_Engineer_ProposalCITY OF MEMORANDUM RANCHO PALOS VERDES TO: HONORABLE MAYOR & CITY COUNCIL MEMBERS FROM: KATHRYN DOWNS, DEPUTY DIRECTOR OF FINANCE (� DATE: JUNE 2, 2015 SUBJECT: STORM DRAIN USER FEE RATE ENGINEER PROPOSAL REVIEWED: DOUG WILLMORE, CITY MANAGER RECOMMENDATION Authorize the City Manager to accept the Harris & Associates Proposal to Finalize and Establish the Water Quality and Flood Protection Fee — Task A (Rate Analysis Report Review) for a lump -sum cost not to exceed $12,500. BACKGROUND The City's Storm Drain User Fee (Fee) approved by property owners in 2005 will sunset in FY15-16 (pursuant to a 2007 measure approved by the City's voters). On April 21, 2015, the City Council received a Staff Report titled Consideration of Revenue Measures that Require Approval by City Voters or Property Owners. Within the report, Staff recommended that the City undertake proceedings to conduct a mail -ballot election of property owners, asking to extend the Fee another ten years using the existing fee methodology. On May 21, 2015, the Storm Drain Oversight Committee conducted its public hearing for the FY15-16 Fee; and included the following in its annual report to the City Council. "All members agree there are more known projects important to public safety and the protection of public and private property than there is funding available, even including the maximum user fee. The Committee believes the User Fee is an appropriate, reliable, dedicated funding source, authorized by the voters, which addresses known storm drain problems. Loss of the User Fee will cause storm drain projects to compete with other types of infrastructure needs for City funding. " STORM DRAIN USER FEE RATE ENGINEER PROPOSAL June 2, 2015 Page 2 of 3 "The Committee recommends the following: 1. The continuation of a dedicated funding source for storm drain projects, and; 2. The identification or creation of an appropriate funding source for mandated water quality projects and programs. " DISCUSSION Following is a summary of the steps to extend the Fee. 1. Complete preparation of the Rate Engineer's Report by September 2015; 2. Mail Notices of Public Hearing in December 2015; 3. City Council conducts Public Hearing in February 2016 to determine whether to conduct a mail -ballot election of property owners; 4. Ballot period February -March 2016; and 5. City Council adopts results of election, and considers ordinance to extend the Fee in April 2016. The first step in the process outlined above is to obtain a Rate Engineer's report. Harris & Associates has served as the City's Rate Engineer for the Fee since inception; and has prepared a proposal for extension of the Fee (see Attachment A). There are two tasks outlined in the proposal. A. Review potential changes to impervious factors and areas (sample of 100 parcels), to minimize the number of appeals & prepare the Notice of City Council public hearing (includes fee structure, proposed amount, basis of calculation, etc.). Lump sum fee of $12,500. B. Finalize and mail the Notice of City Council public hearing, tabulate any protest letters received, provide technical support and attend public hearing, prepare the form of ballot, mail ballots, tabulate ballots. Lump sum fee of $5,000, plus printing, folding & stuffing notices & ballots (2 mailings of about 12,000 addresses) for an estimated fee of $26,500 (postage not included). Optional Service to attend information workshops throughout the process and answer questions relating to the fee methodology and proceedings; and assist with processing Fee appeals. Estimated fee of $7,500. Staff recommends proceeding with Task A, as there have been changes to impervious factors of affected parcels over the last 10 years. Once an updated report is received in September 2015, the City Council may consider whether to proceed with Task B leading to a public hearing. If the City Council approves the recommendation, Staff will add a one-time $12,500 General Fund expenditure allocation to the draft FY15-16 budget. STORM DRAIN USER FEE RATE ENGINEER PROPOSAL June 2, 2015 Page 3 of 3 Attachment A — Harris & Associates Proposal to Finalize and Establish the Water Quality and Flood Protection Fee (page 4) 9 Harris & Associates, MEShaping the f itwe, line: Project eat c7 fime,. April 22, 2015 Ms. Kathryn Downs Acting Director of Finance City of Rancho Palos Verdes 30940 Hawthorne Boulevard Rancho Palos Verdes, CA 90275 Re: Proposal to Finalize and Establish the Water Quality and Flood Protection Fee Dear Kathryn, The following is our proposal for assisting the City with the extension of the Storm Drain User Fee per the California Health and Safety Code Section 5471 et seq. SCOPE OF WORK A. Rate Analysis Report Review This scope item will provide services up to, but not including, the City Council meeting accepting the Rate Analysis Report and setting the public hearing date. This includes reviewing potential changes in impervious factors and areas with the goal to reestablish the proportionality requirement of Proposition 218 and to minimize the number of potential appeals. The individual tasks for this scope item are as follows: 1. Generate a random sample of 100 parcels within the City of Rancho Palos Verdes. Parcels will be stratified into 10 lot size groupings for the purpose of sampling and 10 properties shall be randomly selected from each group. Estimate the individual % impervious cover for each parcel within the sample from the aerial photo layers of the City's GIS. 3. Analyze the estimated % impervious to the assumptions presented in the prior 2005 Rate Analysis Report and make recommendations for adjustments, if necessary. 4. Based on the above analysis and integrating the latest County Assessor's data, provide a draft final 2015 Rate Analysis Report, for review and comment. 5. Finalize the Rate Report, based on comments received and provide up to twenty (20) copies to the City. 6. In conjunction with the City Attorney's office, prepare draft Noticing and Balloting Procedures, for review by City staff, including the City Clerk. These procedures will discuss the mailing out of notices and the receipt, handling and tabulation of protests and ballots. Finalize the procedures based on comments received. In conjunction with City staff and the City Attorney's office, prepare the draft form of the notice per the requirements of Section 6 of Article XIIID of the State Constitution (Proposition 218), for review and approval by the City. The notice will include the proposed fee rate structure, the proposed fee amount for the parcel being noticed, the basis upon which the rates were calculated, the reason for the fee, and the date, time and location of the public hearing. 22 Executive Park, Suite 200, Irvine, California 92614-4705 949.655.3900 FAX 949.655.3995 WeAreHarris,com 4 Ms. Kathryn Downs City of Rancho Palos Verdes April 22, 2015 Page 2 B. Fee Establishment Process 8. Attend the City Council meeting accepting the 2015 Rate Analysis Report and setting the public hearing date. 9. Finalize the Notice of Public Hearing. The notice and other informational material, as specified by the City, will be printed and stuffed into City envelopes (produced by Harris) and mailed with City -provided postage a minimum of 45 days prior to the date of the public hearing. 10. Assist the City with the tabulation of any protest letters that are received. 11. Attend the Public Hearing to present the proposed Storm Drain Fee, provide technical support and answer questions. 12. In conjunction with City staff and the City Attorney's office, prepare the form of the ballot per the requirements of Section 4 of Article XIIID of the State Constitution, for review and approval by the City. 13. The ballots and other informational material, as specified by the City, will be printed and stuffed into City envelopes (produced by Harris) and mailed with City -provided postage a minimum of 45 days prior to the due date. Return envelopes for the ballots will also be produced. 14. After the specified ballot due date, the ballots will be opened and tabulated. An analyst using a laptop computer will tabulate the ballots in the City Clerk's office. 15. Attend the City Council meeting accepting the results of the balloting. 16. (Optional Services) Attend information workshops throughout the City to present the extended fee and answer questions relating to the fee and proceedings and/or assisting City Staff with processing Storm Drain User Fee Appeals. Responsibilities of the City 1. Designate a project manager to manage and coordinate the project. 2. Make available records and documentation in conjunction with preparation of the methodology options and rate structure, including the estimated maintenance cost of the system in sufficient detail to estimate costs between maintenance components. 3. Schedule, administer, and accomplish the publishing of required notices in accordance the authorizing legislation. Schedule meetings and hearings as required by the prevailing law(s) and prepare all notices and all resolutions and ordinances required by the City Council pertaining to the proceedings. 4. Provide qualified legal counsel to provide guidance to the City and financial engineer during the process. 5. Provide postage for any and all mailings within 1 week of each mailing date. SCHEDULE The schedule is to be determined based on input from the City on the potential public hearing date. FEE PROPOSAL Harris & Associates will provide the services described above for the following fees: as Harris & A�ociates Ms. Kathryn Downs City of Rancho Palos Verdes April 22, 2015 Page 3 Task A — Rate Analysis Report Review Items 1 through 7..........................................................................................$12,500 lump sum Task B — Fee Reestablishment Process Items 8 through 15..........................................................................................$5,000 lump sum (excluding printing and postage) Plus printing, folding and stuffing of notices and ballots ....................... $26,500 estimated fee at cost plus 10% (2 mailings) Optional Item 16....................................................................................... $7,500 estimated fee per the schedule of hourly rates shown below Additional City Council and any FAC meetings....................................$750 lump sum per meeting Harris & Associates Schedule of Hourly Rates K. Dennis Klingelhofer, PE — Project Director ............................ $245 / hour Dennis A. Anderson — Project Manager .................................... $220 / hour Alison Bouley, P.E. — Deputy Project Manager ......................... $190 / hour Project Engineer........................................................................ $150 / hour Senior Project Analyst............................................................... $115 / hour Project Analyst............................................................................ $90 / hour Project Technician....................................................................... $75 / hour Clerical Staff................................................................................ $65 / hour These hourly rates may be updated on an annual (calendar year) basis. Attendance at meetings as described in the Scope of Work and most direct costs such as vehicle usage and mileage, equipment usage (including computers), and printing and copying are included in the lump sum fees and hourly rates except where noted. Invoices will be submitted monthly for services provided in the previous month and shall be paid within 30 days of receipt. It is assumed that this project will be subject to the same terms and conditions of our current contract with the City. We look forward to continuing our working relationship with you both and the City. Please let us know if you have any questions regarding our scope of work or fees. Sincerely, Harris & Associates Dennis A. Anderson Director, Public Finance an Harris & A65 ociates