LOCAL AGENCY FORMATION COMMISSION ORANGE COUNTY 2677 North Main Street, Suite 1050 Santa Ana, CA (714) FAX (714)

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1 LOCAL AGENCY FORMATION COMMISSION ORANGE COUNTY 2677 North Main Street, Suite 1050 Santa Ana, CA (714) FAX (714) REGULAR MEETING AGENDA Wednesday, December 13, :15 a.m. Planning Commission Hearing Room Hall of Administration 333 W. Santa Ana Blvd. 10 Civic Center Plaza, Santa Ana, CA Any member of the public may request to speak on any agenda item at the time that item is being considered by the Commission. 1. CALL THE MEETING TO ORDER 2. PLEDGE OF ALLEGIANCE COMMISSIONER CHARLEY WILSON 3. ROLL CALL 4. ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) 5. APPROVAL OF MINUTES a.) November 8, 2017 Regular Commission Meeting 6. PUBLIC COMMENT This is an opportunity for members of the public to address the Commission on items not on the agenda, provided that the subject matter is within the jurisdiction of the Commission and that no action may be taken on an off-agenda item(s) unless authorized by law. 7. CONSENT CALENDAR None 8. PUBLIC HEARING None

2 9. COMMISSION DISCUSSION AND ACTION a.) Proposed Professional Consultant Services Agreements with Policy Consulting Associates and Richard Berkson Associates The Commission will consider approval of proposed agreements with Policy Consulting Associates and Richard Berkson Associates to conduct analyses for the focused Municipal Service Review for the potential transfer of the San Juan Capistrano Utility Systems. b.) Legislative Report December 2017 The Commission will receive a brief overview of the legislation supported by the Commission during the FY session and a summary of the LAFCO-related topics expected to be the subject of proposed bills in the upcoming legislative session. 10. COMMISSIONER COMMENTS This is an opportunity for Commissioners to comment on issues not listed on the agenda, provided that the subject matter is within the jurisdiction of the Commission. No discussion or action may occur or be taken, except to place the item on a future agenda if approved by Commission majority. 11. EXECUTIVE OFFICER S REPORT Executive Officer s report on upcoming events and activities of the Executive Officer since last meeting. 12. INFORMATIONAL ITEMS & ANNOUNCEMENTS None 13. CLOSED SESSION None 14. ADJOURNMENT OF REGULAR COMMISSION MEETING NOTICE REGARDING ITEMS DISTRIBUTED TO THE COMMISSION LESS THAN 72 HOURS PRIOR TO THE LAFCO REGULAR MEETING: Pursuant to Government Code Section public records that relate to open session agenda items that are distributed to a majority of the Commission less than seventy-two (72) hours prior to the meeting will be available to the public at Orange County LAFCO offices at 2677 North Main Street, Suite 1050, Santa Ana, CA during regular business hours. These records when possible will also be made available on the OC LAFCO website at NOTICE: State law requires that a participant in a LAFCO proceeding who has a financial interest in a decision and who has made a campaign contribution of more than $250 to any commissioner in the past year must disclose the contribution. If you are affected, please notify the Commission s staff before the hearing. LAFCO Agendas and supporting documentation are available on the Internet at

3 Local Agency Formation Commission Orange County DRAFT MINUTES LAFCO REGULAR MEETING AGENDA 5a Wednesday, November 8, :00 a.m. Planning Commission Hearing Room Hall of Administration 333 W. Santa Ana Blvd. 10 Civic Center Plaza, Santa Ana, CA CALL TO ORDER Chair McGregor called the regular meeting of the Orange County Local Agency Formation Commission (OC LAFCO) to order at 8:06 a.m. 2. PLEDGE OF ALLEGIANCE Commissioner Withers led the Pledge of Allegiance. 3. ROLL CALL The following Commissioners and Alternates were present: Chair Derek J. McGregor Commissioner Lisa Bartlett Commissioner Cheryl Brothers Commissioner Charley Wilson Commissioner John Withers Alternate Commissioner James Fisler The following Commissioner was delayed: Vice Chair Allan Bernstein (arrived at 8:13 a.m.) The following Commissioners were absent: Commissioner Todd Spitzer Alternate Commissioner Wendy Bucknum

4 November 8, 2017 DRAFT Minutes Page 2 of 7 Alternate Commissioner Lou Penrose Alternate Commissioner Michelle Steel The following LAFCO staff members were present: Executive Officer Carolyn Emery Assistant Executive Officer Debra Kurita Policy Analyst Luis Tapia Policy Analyst Gavin Centeno Commission Clerk Cheryl Carter-Benjamin Legal Counsel Scott Smith 4. ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATION (Received After Agenda Distribution) Commission Clerk Cheryl Carter-Benjamin noted supplemental correspondence from Costa Mesa Sanitary District received after the agenda distribution. 5. APPROVAL OF MINUTES 5a. October 11, Regular Commission Meeting Minutes The regular minutes were approved with no revisions. MOTION: SECOND: FOR: Approve the October 11, 2017 Regular Commission Meeting Minutes. (John Withers) Lisa Bartlett Derek J. McGregor, Lisa Bartlett, Cheryl Brothers, John Withers AGAINST: None ABSTAIN: Charley Wilson MOTION PASSED 6. PUBLIC COMMENT Chair McGregor requested public comments on any non-agenda items. Bob Ooten, Board Member for the Costa Mesa Sanitary District commented on the supplemental correspondence provided to the Commission. He noted that the document identifies concerns about information provided by Commission Fisler to the Commission regarding a study that supports the consolidation of the Costa Mesa Sanitary District with the Mesa Water District.

5 November 8, 2017 DRAFT Minutes Page 3 of 7 Chair McGregor closed public comments. 7. CONSENT CALENDAR There were no consent calendar items. 8. PUBLIC HEARING There were no public hearing items. 9. COMMISSION DISCUSSION AND ACTION 9a. Proposed Revisions to the OC LAFCO Bylaws and Policy and Guidelines for Disadvantage Unincorporated Communities Chair McGregor provided an overview to the Commission, noting that these are two of several policies that were identified for review during the strategic planning session. He further noted that the Ad-Hoc Committee reviewing the policies is comprised of himself, Commissioner Withers and Commissioner Brothers. He concluded by stating that the proposed changes to the Bylaws and the adoption of the new policy on Disadvantaged Unincorporated Communities are recommended by the Ad-Hoc Committee for final approval by the Board. Commission Clerk Cheryl Carter-Benjamin stated that there was one speaker on this item. John Lewis, Lewis Consultant Group, LLC, commented that the proposed deletion of the five-day noticing requirement from Section 1.27(F) does not support transparency by the Commission and should not be removed. Legal Counsel Smith responded that the policy references the provisions of the Cortese-Knox-Hertzberg Act, and to ensure consistency with the Act, the specific noticing requirements within the local policy were removed. Mr. Smith continued by stating that it is OC LAFCO s standard practice to publish its agenda seven days in advance, which exceeds the legal requirements. Commissioner Bartlett recommended maintaining the current language to reinforce the commitment to openness and transparency. Mr. Smith stated that the policy could reflect the current practice of posting the agenda not less than seven days prior to the meeting. MOTION: Approve the proposed revisions to Commission Bylaws with the addition of the phrase, not less than seven days to Section 1.27(F) and adopt the new policy on Disadvantaged Unincorporated Communities. (John Withers)

6 November 8, 2017 DRAFT Minutes Page 4 of 7 SECOND: FOR: AGAINST: None ABSTAIN: None MOTION PASSED Cheryl Brothers Derek J. McGregor, Lisa Bartlett, Cheryl Brothers, Charley Wilson, John Withers 9b. FY Comprehensive Quarterly Report First Quarter Assistant Executive Officer Debra Kurita provided an overview of the Comprehensive Report for the first quarter of the fiscal year. She highlighted the progress on several projects including the stakeholders outreach process for the next round of Municipal Service Reviews and the outreach efforts on the Unincorporated Islands program. She noted that earlier in the week, the La Habra City Council approved the actions moving forward with the annexation of the six remaining unincorporated islands within the City s sphere. She also discussed the financial details provided in the report, highlighting a new feature that displays the status of two contracts that were approved and budgeted in the fiscal year, and informing the Commission that 95 percent of the apportionments for have been collected and that the expenditures are within budget for the first quarter. Vice Chair Bernstein arrived during this agenda item at 8:13 a.m. MOTION: SECOND: FOR: AGAINST: None ABSTAIN: None MOTION PASSED Receive and file the Comprehensive Quarterly Report. (Allan Bernstein) John Withers Derek J. McGregor, Allan Bernstein, Lisa Bartlett, Cheryl Brothers, Charley Wilson, John Withers 9c. Proposed 2018 LAFCO Calendar Executive Officer Carolyn Emery gave a brief staff report on the proposed Commission meeting dates for Ms. Emery also added that the calendar includes the Strategic Planning Session to be conducted in March, in place of the Commission s regular meeting, with an adjusted start time of 9:00 a.m., meeting location to be determined. MOTION: SECOND: FOR: Adopt the 2018 Meeting Calendar. (Lisa Bartlett) Allan Bernstein Derek J. McGregor, Allan Bernstein, Lisa Bartlett, Cheryl Brothers, Charley Wilson, John Withers

7 November 8, 2017 DRAFT Minutes Page 5 of 7 AGAINST: None ABSTAIN: None MOTION PASSED 9d. California Associations of Local Agency Formation Commissions (CALAFCO) Board of Directors Update Commissioner Brothers provided an overview of actions and discussions from CALAFCO Board. She started with an update on the results of the election process and appointments. She announced her appointment to the Ad Hoc Committee that will focus on the CALAFCO budget and the dues allocation formula. She also shared that CALAFCO staff will offer assistance to individual LAFCOs in establishing websites and in mapping Disadvantaged Unincorporated Communities, to ensure compliance with new State law. MOTION: SECOND: FOR: AGAINST: None ABSTAIN: None MOTION PASSED Receive and file the CALAFCO Update. (Allan Bernstein) John Withers Derek J. McGregor, Allan Bernstein, Lisa Bartlett, Cheryl Brothers, Charley Wilson, John Withers 10. COMMISSIONER COMMENTS Commissioner Fisler began to address the supplemental correspondence received from the Costa Mesa Sanitary District. Legal Counsel Smith informed the Commissioner that he could provide a brief response, but could not discuss any offagenda items under Commissioner Comments. Chair McGregor recommended that this off-agenda item be placed on the agenda of a future meeting, to give the Commissioners an opportunity to review the document and allow time for further discussion with legal counsel. Commissioner Fisler agreed. Legal Counsel Smith asked that Chair McGregor, with the concurrence of the Commission, have the item placed on the next agenda. The Commissioners concurred. The Commission Clerk asked for clarity as to the action. Mr. Smith clarified that, with the consensus of the Commission, the Chair directed that the item be placed on the agenda for the next regular Commission meeting under the Commissioner Comments section. Vice Chair Bernstein extended a Happy Thanksgiving to the Commissioners and staff.

8 November 8, 2017 DRAFT Minutes Page 6 of 7 Commissioner Bartlett also wished everyone a Happy Thanksgiving. She also offered to make parking available in the employee s parking structure for the Commissioners and staff attending the Commission meetings. She referred anyone interested to contact her Policy Aide, Mary Follo. Commissioner Brothers congratulated the Executive Officer Carolyn Emery and staff for a job well done on the Annual CALAFCO Conference program. Chair McGregor noted the excellent program at this year s CALAFCO conference, congratulated Executive Officer Carolyn Emery, who served as the Program Chair, and thanked the LAFCO staff for their leadership and representation. 11. EXECUTIVE OFFICER S REPORT Executive Officer Carolyn Emery informed the Commission of the following items: CALAFCO Annual Conference: Thanked Chair McGregor and Commissioner Brothers for their participation at the 2018 CALAFCO Annual Conference. Hall of Administration Building Access: LAFCO will work with County staff to obtain access to the facility prior to the Commission meeting start time. She further noted that public access is not available until 8:00 a.m. Chair McGregor proposed changing the current start time from 8:00 a.m. to 8:15 a.m. Legal Counsel Scott Smith stated with the recent adoption of the Bylaws and calendar, a motion for reconsideration would be needed by the Commission. MOTION: SECOND: FOR: AGAINST: ABSTAIN: Reconsider Agenda Items #9a and 9c with revisions to the Bylaws and the 2018 Meeting Calendar to reflect the start time of 8:15 a.m. effective December (Cheryl Brothers) Lisa Bartlett Derek J. McGregor, Allan Bernstein, Lisa Bartlett, Cheryl Brothers, Charley Wilson, John Withers None None MOTION PASSED 12. INFORMATIONAL ITEMS & ANNOUNCEMENTS 12a. CALAFCO Annual Conference Chair McGregor noted the update was provided earlier by Commissioner Brothers.

9 November 8, 2017 DRAFT Minutes Page 7 of CLOSED SESSION Chair McGregor announced that there was no closed session. 14. ADJOURNMENT OF REGULAR COMMISSION MEETING The Regular Commission meeting was adjourned at 8:44 a.m. Derek J. McGregor, Chair Orange County Local Agency Formation Commission By: Cheryl Carter-Benjamin Commission Clerk

10 LOC AL AGENCY FORMATION COMMISSION GE COUNTY AFCO EST 1963 Decernber13,2017 ORANGE COUNTY 9a CHAIR DEREK J. MCGREGOR Represen1<1l1ve or Gener<:1I Public VICE CHAIR DR. ALLAN BERNSTEIN Councilmember CnyofTustJn TO: FROM: Local Agency Forrnation Commission Executive Officer Assistant Executive Officer LISA BARTLETT Supc1v1sor 5"' District CHERYL BROTHERS Councllmember City of fountain Valley TODD SPITZER Supervisor 3'" District CHARLEY WILSON Dfrector S<lntct Margama Water District JOHN WITHERS Director Irvine Ranch Water District Al.TERNATE WENDY 8UCKNUM Councilmember City of Mission Vie;o Al.TERNATE JAMES FISLER Director Mesa Water District Al.TERNATE Lou PENROSE Representacive ot General Public ALTERNATE MICHELLE STEEL Supervisor 2"' DiStrlct CAROLYN E MERY Executive Officer SUBJECT: Proposed Professional Consultant Services Agreements with Policy Consulting Associates and Richard Berkson Associates BACKGROUND In August 2016, OC LAFCO received an application from the City of San Juan Capistrano to conduct a focused Municipal Service Review (MSR) to analyze and review the potential transfer of the City's water and wastewater operations and facilities to a successor public agency. This project requires two studies: an assessment of the City's systems and facilities and an analysis of the options for the potential h ansfer of those systerns to one or more special districts with service boundaries that are adjacent to the City. As specialized technical expertise is required for these analyses, it is necessary to have independent professional consultants perform these assessments. After a competitive process, OC LAFCO staff recommends that the Commission approve agreements with Policy Consulting Associates to prepare the infrasb:ucture assessment and Berkson Associates to prepare the fiscal assessment of the alternative service delivery options for the City's utility systems. These are highly-qualified firms with expertise in conducting these types of assessments and in-depth experience in MSRs. DISCUSSION In order to secure proposals from firms qualified to perform these analyses, in August 2017, OC LAFCO released two separate Requests for Proposals (RFPs) for the infrastructure and fiscal assessments. These RFPs were directly distributed to approximately 60 firms and the documents were posted on both the OC LAFCO and CALAFCO websites. Additionally, the OC LAFCO staff, together with 2677 No1 Lh Main Street Suite I 050. Santa Ana. CA (I 14) rax (714) hltp//

11 Proposed Agreements with Policy Consulting Associates and Berkson '-'-e'<-lll'-"'-l 13, 2017 Page 2 of 3 representatives from the City, conducted a pre-proposal conference in September to discuss the scope of work and answer project-related questions from potential consultants. After receipt of the proposals, a review panel composed of the OC LAFCO Executive Officer and Assistant Executive Officer, together with the City's Public Works and Utilities Director and the Assistant Utilities Director, evaluated the responses and conducted interviews with three of the firms. Infrastructure Assessment In response to the Infrastructure Assessment RFP, the agency received proposals from three firms: Kayuga Solutions, E. Mulberg & Associates, and Policy Consulting Associates. While all of the firms provided comprehensive proposals, the review panel ranked the proposal submitted by Policy Consulting Associates (PCA) as the top choice. As a part of their proposal, PCA identified the firm of QK as the subcontractor that will provide the engineering expertise. PCA' s ranking was based on the firm's relevant experience and qualifications, an understanding of the focused MSR scope of work, in-depth experience in MSRs, quality of professional references, and the ability to meet the parameters for the project schedule milestones. Further, the personnel who will be assigned to this project, Jennifer Stephenson and Oxana Wolfson from PCA, and Ken Bonesteel and Jerome Keene from QK, have extensive experience in project management and assessing infrastructure related to water and wastewater services provided by public agencies. Ms. Stephenson, who will serve as the project manager, has performed in that capacity for other LAFCOs in preparing over 200 municipal service reviews and other studies; her firm was also awarded the Outstanding Associate Member Award by CALAFCO this year. The cost proposal from PCA is for an amount not to exceed $83,800. Staff is recommending that the agreement with PCA be approved with a ten percent contingency that would allow to request additional work or meetings, if necessary. Fiscal Assessment In response to the Fiscal Assessment RFP, the agency received proposals from four firms: Berkson Associates, Lechowicz and Tseng, E. Mulberg & Associates, and Raftelis. The review panel ranked Berkson Associates as the top choice based on extensive relevant experience in preparing fiscal and feasibility studies for LAFCOs, including performing numerous analyses for Municipal Service Reviews; an understanding of the scope of work reflected by a detailed and comprehensive description of the approach to the project; quality of professional references; and the ability to meet project schedule deadlines. Mr. Richard Berkson will serve as the project manager for performing the analysis. Mr. Berkson has over 30 years of experience preparing financial analyses of utility operations, district reorganizations, annexations and other LAFCO-related actions.

12 Proposed Agreements with Policy Consulting Associates and Berkson Associates December 13, 2017 Page 3 of 3 His experience in preparing feasibility studies for various LAFCO water and wastewater proposals makes him well qualified for this project. The cost proposal from Berkson Associates is for an amount not to exceed $49,700. Staff is recommending that this agreement be approved with a ten percent contingency that would allow LAFCO to request additional work or meetings, if necessary. If these agreements are approved by the Commission, the full cost will be covered by the application fees paid by the City. Once the fees are received, the agreements will commence in December. RECOMMENDATION Staff recommends that the Commission: 1. Approve an agreement with Policy Consulting Associates for the Infrastructure Assessment for the San Juan Capish ano Utility Systems Municipal Services Review in the total amount not to exceed $92, Approve an agreement with Berkson Associates for the Fiscal Assessment of Alternative Service Options for the San Juan Capish ano Utility Systems Municipal Services Review in the total not to exceed $54,670. Respectfully submitted, ~<-1cl/ DEBRA KURITA Attachments: A. Proposed Agreement with Policy Consulting Associates B. Proposed Agreement with Berkson Associates

13 ATTACHMENT A AGREEMENT FOR SERVICES BETWEEN ORANGE COUNTY LOCAL AGENCY FORMATION COMMISSION AND POLICY CONSULTING ASSOCIATES, LLC This Agreement is made effective by and between ORANGE COUNTY LOCAL AGENCY FORMATION COMMISSION (hereinafter referred to as "LAFCO"), organized and operating pursuant to the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, as amended (Government Code Sections et seq.), and Policy Consulting Associates, LLC ("Consultant"). RECITALS A. LAFCO is a public agency of the State of California and is in need of professional consultant services to perform an infrastructure assessment of the City of San Juan Capistrano's Utility Systems (hereinafter referred to as "the Project"). B. Consultant is qualified by virtue of experience, training, education and expertise to provide such services. C. This Agreement is to establish the terms and conditions for LAFCO to retain Consultant to provide the services described herein. AGREEMENT NOW, THEREFORE, IT IS AGREED AS FOLLOWS: 1. Term and Time of Performance. The term of this Agreement shall be for eight months unless terminated in accordance with the procedures outlined in Section 15 of this Agreement. Consultant shall perform its services hereunder in a prompt and timely manner and in accordance with the timeline provided in Exhibit "A". 2. Services. Consultants shall provide LAFCO with the services described in the Scope of Services attached hereto as Exhibit "A."

14 OC LAFCO draft agreement with Policy Consulting Associates 3. Compensation. a. Subject to paragraph 3(b) below, LAFCO shall pay for such services m accordance with the Schedule of Charges set forth in Exhibit "B." b. The total amount paid for services rendered by Consultant pursuant to Exhibit "A" shall not exceed the sum of $83,800.00, unless otherwise agreed to by both parties as outlined in Section 4. c. Prior to the bi-weekly financial mail out, Consultant shall submit to LAFCO an invoice with a statement for services itemizing the services rendered. LAFCO shall, within 30 days of receiving such invoice, review the invoice and pay all non-disputed and approved charges thereon. If the LAFCO disputes any of Consultant's fees, LAFCO shall give written notice to Consultant of any disputed fees within 15 days ofreceipt of the invoice. 4. Additional Work If changes in the work seem merited by Consultant or LAFCO, and informal consultations with the other party indicate that a change is warranted, it shall be processed by LAFCO in the following manner: Consultant shall forward a letter outlining the changes to LAFCO with a statement of estimated changes in fee or time schedule. An amendment to the Agreement shall be prepared by LAFCO and executed by both parties before performance of such services or LAFCO will not be required to pay for the changes in the scope of work. Such amendment shall not render ineffective or invalidate unaffected portions of this Agreement. 5. Maintenance of Records. Books, documents, papers, accounting records, and other evidence pertaining to costs incurred shall be maintained by Consultant and made available at all reasonable times during the Agreement period and for four ( 4) years from the date of final payment under the contract for inspection by LAFCO. 6. Delays in Performance. Neither LAFCO nor Consultant shall be considered in default of this Agreement for delays in performance caused by circumstances beyond the reasonable control of the nonperforming party. For purposes of this Agreement, such circumstances include but are not limited to, abnormal weather conditions; floods; earthquakes; fire; epidemics; war; riots and other civil disturbances; strikes, lockouts, work slowdowns, and other labor disturbances; sabotage or judicial restraint. Should such circumstances occur, the non-performing party shall, within a reasonable time of being prevented from performing, give written notice to the other party describing 2

15 OC LAFCO drafi agreement with Policy Consulting Associates the circumstances preventing continued performance and the efforts being made to resume performance of this Agreement. 7. Consultant shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local government. 8. Consultant's services will be performed in accordance with generally accepted professional practices and principles and in a manner consistent with the level of care and skill ordinarily exercised by members of the profession currently practicing under similar conditions. 9. Assignment and Sub-consultant. LAFCO is aware that the Consultant has entered into a sub-contract with QK for the provision of engineering services for the term of this project. Consultant shall not assign, sublet, or transfer this Agreement or any rights under or interest in this Agreement to any additional subcontractors without the written consent of LAFCO, which may be withheld for any reason. Nothing contained herein shall prevent Consultant from employing independent associates and sub-consultants as Consultant may deem appropriate to assist in the performance of services hereunder. 10. Independent Contractor. It is agreed that Consultant shall act and be an independent contractor and is not an agent or employee of LAFCO and is not entitled to participate in any compensation plans or other benefits LAFCO provides for its employees. All services shall be performed by Consultant or under its supervision. Consultant will determine the means, methods and details of performing the services, subject to the requirements of this Agreement. Any additional personnel performing the services under this Agreement on behalf of Consultant shall also not be employees of LAFCO and shall at all times be under Consultant's exclusive direction and control. Consultant shall be responsible for all reports and obligations respecting such personnel, including but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance and workers' compensation insurance. 11. Integration. This Agreement represents the entire understanding of LAFCO and Consultant as to those matters contained herein, and supersedes and cancels any prior oral or written 3

16 OC LAFCO draft agreement with Policy Consulting Associates understanding, promises or representations with respect to those matters covered hereunder. This Agreement may not be modified or altered except in writing signed by both parties hereto. This is an integrated Agreement. 12. Insurance. Consultant shall take out and maintain, during the performance of all work under this Agreement, in amounts not less than specified herein, all insurance set forth in Exhibit C hereto, in a form and with insurance companies acceptable to LAFCO. 13. Indemnification. To the fullest extent permitted by law, Consultant shall defend, indemnify and hold LAFCO, its Board, members of the Board, employees, and authorized volunteers free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any alleged acts, errors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant's services or this Agreement, including without limitation the payment of all consequential damages, expert witness fees and attorney's fees and other related costs and expenses. Notwithstanding the foregoing, to the extent Consultant's services are subject to Civil Code Section , the above indemnity shall be limited, to the extent required by Civil Code Section , to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant. In addition, Consultant shall defend, with counsel of LAFCO' s choosing and, to the extent permitted by Civil Code Section , at Consultant's own cost, expense and risk, any and all claims, suits, actions or other proceedings of every kind covered by the first paragraph of this section that may be brought or instituted against LAFCO or its Board, members of the Board, employees, and authorized volunteers. Consultant shall pay and satisfy any judgment, award or decree that may be rendered against LAFCO or its Board, members of the Board, employees, and authorized volunteers as part of any such claim, suit, action or other proceeding. Consultant shall also reimburse LAFCO for the cost of any settlement paid by LAFCO or its Board, members of the Board, employees, or authorized volunteers as part of any such claim, suit, action or other proceeding. Such reimbursement shall include payment for LAFCO' s attorney's fees and costs, including expert witness Consultant shall reimburse LAFCO and its Board, members of the Board, employees, and/or authorized volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by LAFCO, its Board, members of the Board, employees, or authorized volunteers. 4

17 OC LAFCO draft agreement with Policy Consulting Associates 14. Laws, Venue, and Attorneys' Fees. This Agreement shall be interpreted in accordance with the laws of the State of California. If any action is brought to interpret or enforce any term of this Agreement, the action shall be brought in a state or federal court situated in the County of Orange, State of California. In the event of any such litigation between the parties, the prevailing party shall be entitled to recover all reasonable costs incurred, including reasonable attorney's fees, as determined by the court. 15. Termination or Abandonment. 16. a. LAFCO has the right to terminate or abandon any portion or all of the work under this Agreement by giving ten (10) calendar days written notice to Consultant. In such event, LAFCO shall be immediately given title and possession to all original field notes, drawings and specifications, written reports and other documents produced or developed for that portion of the work completed and/or being abandoned. LAFCO shall pay Consultant the reasonable value of services rendered for any portion of the work completed prior to termination. If said termination occurs prior to completion of any task for the Project for which a payment request has not been received, the charge for services performed during such task shall be the reasonable value of such services, based on an amount mutually agreed to by LAFCO and Consultant of the portion of such task completed but not paid prior to said termination. LAFCO shall not be liable for any costs other than the charges or portions thereof which are specified herein. Consultant shall not be entitled to payment for unperformed services, and shall not be entitled to damages or compensation for termination of work. b. Consultant may terminate its obligation to provide further services under this Agreement upon thirty (30) calendar days' written notice to LAFCO only in the event of substantial failure by LAFCO to perform in accordance with the terms of this Agreement through no fault of Consultant. Consultant shall assign Jennifer Stephenson as the Principal Consultant and Oxana Wolfson as the Senior Project Analyst for Policy Consulting Associates. The Principal Consultant and Senior Project Analyst shall not be removed from the Project or reassigned without the prior written consent of LAFCO. Consultant shall assign Ken Bonesteel as Senior Project Manager and Jerome Keene as Senior Planner for QK as sub consultants. The Senior Project Manager and Senior Planner will not be removed from the Project or reassigned without prior written consent of LAFCO. 5

18 OC LAFCO draft agreement with Policy Consulting Associates 17. Any notice or instrument required to be given or delivered by this Agreement may be given or delivered by depositing the same in any United States Post Office, certified mail, and return receipt requested, postage prepaid, addressed to the following and shall be effective upon receipt thereof: LAFCO: Attn: Executive Officer LAFCO 2677 Main Street, Suite 1050 Santa Ana, CA POLICY CONSUL TING ASSOCIATES: Jennifer Stephenson, Principal Policy Consulting Associates Via Careza Murrieta, CA Third Party Rights. 19. Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than LAFCO and the Consultant. The unenforceability, invalidity or illegality of any provision(s) of this Agreement shall not render the other provisions unenforceable, invalid or illegal. 20. Acknowledgment. Consultant acknowledges that by executing this agreement, Consultant is also, in good faith, determining that the appointment meets each of the requirements set forth in Government Code Section , including the unemployment insurance requirement. That is, while LAFCO is not in a position to do so, by signing the acknowledgement at the conclusion of this agreement, the Consultant is certifying it has not received unemployment insurance payments within the past 12 months arising from work performed as a retiree for any public employer. Further, LAFCO has no way of monitoring the hours that Consultants works for another OCERS employer. As such, it is the responsibility of the Consultants to ensure that the total hours worked for LAFCO and any other OCERS employer do not exceed 960 hours in the aggregate during the fiscal year. [SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. 6

19 OC LAFCO draft agreement with Policy Consulting Associates ORANGE COUNTY LOCAL AGENCY FORMATION COMMISSION POLICY CONSUL TING ASSOCIATES By: Dated: Approved as to form: General Counsel, Orange County Local Agency Formation Commission 7

20 OC LAFCO draft agreement with Policy Consulting Associates EXHIBIT "A" SCOPE AND SCHEDULE OF SERVICES The scope of the project to be completed by the Consultants is as outlined in the proposal for services and reiterated here. TASK 1.0 Project Management The objective of this task is to provide project management activities required to coordinate engineering disciplines and related services required for activities outlined in this scope of work. Subtask 1.1 Project Management, Progress Reporting, Cost and Schedule Control The consulting firms will track their respective time and budget, work elements accomplished, work items planned for the next period, and staffing needs and prepare brief monthly progress reports for LAFCO on the status of the project, schedule, and budget. Subtask 1.2 Project Coordination and Integration of Work Effort PCA will communicate, interact, and coordinate with LAFCO, as needed, to assure the efficient and effective completion of activities related to the development of the Infrastructure Assessment. Subtask 1.3 Kickoff Meeting The project will be launched at a kickoff meeting between City staff, LAFCO and the consulting team members, including Jennifer Stephenson, Project Manager from PCA and the QK's senior project manager and senior planner. The following objectives will be accomplished at this meeting: Confirm project objectives, Define project roles distribute project roster, and provide contact information for key personnel for City and potential successor agencies Discuss list of any additional data needed for completion of the study, Review schedule project milestones, and Distribute project management plan. Additionally, the Consultants will discuss the following with the City: Identify and discuss City issues or concerns regarding existing conditions or known system deficiencies and potential future issues, and Review approach for defining the utility system performance criteria, Assumptions: It is anticipated that the project will be completed within four ( 4) months; One (1) kick-off meeting is necessary; and, if necessary, one video-conference follow-up meeting to the kick-off Two (2) Project Meetings with the project team have been budgeted for; Two (2) coordination meetings with the project team have been budgeted for; 8

21 OC LAFCO draft agreement with Policy Consulting Associates Conference calls will be held with the City as needed, however, six ( 6) progress meetings/conference calls have been budgeted for. Deliverables: Project progress reports, Monthly Project Management, Cost, and Schedule Control Reports. Task 2.0 Data Collection and Document Review Subtask 2.1 Data Requests The consulting team will review available, relevant reports and applicable data for use in this project, as well as other relevant information including, but not limited to: Relevant electronic maps extracted from the City's GIS, Water utility GIS database and/or plat maps with service area boundaries, Adopted Master Plans, Improvement plans/as-built drawings for recent water and wastewater projects that may not be ineluded in the City's GIS or Plat Maps, Design standards or design manuals for the water and wastewater systems, Recent hydrant fire flow reports, Monthly water usage reports for the past five complete years, Metered water usage information for the last complete year, Water operational data and records, Recent well efficiency reports and pump curves for all active wells, and Recent construction unit costs for pipelines, wells, and other relevant infrastructure. The site visit by QK persom1el will allow inspection of water and wastewater facilities to assess condition of these facilities. During this visit, QK staff will also meet with City operations personnel to collect data on system operation and challenges. Subtask 2.3 Document Review Review existing data and reports to look for any missing information that may be critical for preforming the assessment. Deliverables: Verbal report on data collection progress. TASK 3.0 Infrastructure, Operation and Systems Analysis Subtask 3.1 Review of Water and Wastewater Facilities and Infrastructure This review will look at the overall functionally of the water and wastewater systems in relation to: Adequacy of infrastructure and facilities, 9

22 OC LAFCO draft agreement wuh Policy Consulting Associates Present and planned capacity of infrastructure and facilities that includes water supply and water and wastewater system reliability, Infrastructure serviceable life, needs and deficiencies, Costs for infrastructure improvements or upgrades, and Proximity to adjacent systems. Subtask 3.2 Staffing Level Review Present staffing levels will be reviewed to look for optimum utilization. Subtask 3.3 Preventive Maintenance Program Review The existing preventive maintenance programs for water and wastewater will be reviewed to assess adequacy of currently implemented procedures and make recommendations as needed. Subtask 3.4 Operational Policies and Procedures Review PCA will examine sampling frequencies, quality control measures, and the type and frequency of violations. These findings will be included in the final report. Deliverables: Monthly progress reports. TASK4.0 Draft Report A draft report will summarize the data collected, the system analysis of the infrastructure and operations, and finding and recommendations from the system analysis. It will include: Analysis on adequacy of infrastructure and facilities, Present and planned capacities, Infrastructure serviceable life, Estimated costs for necessary improvements, Staffing level adequacy, Permitting requirements assessment, Preventive maintenance programs adequacy, Assessment of operational procedures, Ability to consolidate with adjacent water systems, and Ability to be transferred to successor agencies. Deliverables: Admin draft report delivered to LAFCO and the City for review and comment in an electronic format. Select consulting team members will meet with LAFCO and the City to review comments in person or via video- or teleconference. 10

23 OC l"a FCO draft agreement with Policy Consulting Associates TASKS.0 Final Report Subtask 5. 1 Prepare Final Report The final report will be prepared incorporating comments provided from the review by LAFCO and the City. Contract Effective Dat e MILESTONE Infrastructure and Fisca l Assessment - Review of Documents Kick Off Meeting* Infrastructure Assessment Preparation and Data Collection and Review completed by Infrastructure Assessment Administrative Draft Com ments from LAFCO and City received on Infrastructure As s~s s m e nt by Infrastructure Assessment Final Administrative Draft LAFCO Study Session Presentation Revised Report, if applicab le LAFCO Regu lar M eet ing DATE Mid-Dec Mid-Dec to M id- Jan Week of January 3rd 2/15/18 3/12/18 3/26/18 5/14/18 6/13/18 6/27/18 7/11/18 The anticipated completion of the project is end of July 2018 (approximately seven months), in accordance with the expectations of LAFCO, assuming that the contract is executed by mid December This schedule is dependent on receiving infomrntion and feedback in a timely manner. 11

24 OC la FCO draft agreement with Policy Consulting Associates EXHIBIT "B" SCHEDULE OF CHARGES/PAYMENTS Invoices to LAFCO will be submitted based on the percentage of work performed and the personnel involved in each billing cycle. Costs will not exceed $83,800, unless otherwise agreed upon per the signed agreement. Costs will be broken down according to task based on the following table: Task Description Fee Type Fee Amount 1.0 Project Management Fixed $ Oata Collection and Oocument Review Fixed $12, Infrastructure, Operation and Systems A nalysis fixed $30, I Draft Report Preparation Fixed $ 17, Final Report and Presentation Fixed $ Total Cost: $83,800 Notes: 1. The above estimate includes $2,600 in expenses for mileage, document reproduction and direct expenses. Unexpected, additional expenses for reproduction, mailing, mileage, etc. will be billed separately after consultation with the client. 2. Any additional services requested in writing and approved by the client will be provided on a time-and-materials basis in a total amount not to exceed I 0% of the total compensation or $92, The current hourly billing rates for key personnel are: Jennifer Stephenson, PCA Principal: $ 150; Oxana Wolfson, PCA Principal: $ 150; Ken Bonesteel, QK Project Manager: $ 180; Lee Fremming, QK Senior Engineer: $ 180; Jerome Keene, QK Senior Planner: $142; : Jennifer Miller, QK Associate Planner: $97. Consultant shall submit statements for services to LAFCO pursuant to paragraph 3(c) for the life of the Project or termination of the Agreement pmsuant to paragraph 1 S(a). Statements for services shall itemize charges as they relate to the completion of tasks defined in Exhibit A. Statements for services shall refl ect only the actual hours incurred in performing the services under this Agreement, in accordance with the fee schedule set forth in this Exhibit B, and subject provisions of Section 3 of this agreement. 12

25 OC LAFCO drafi agreement with Policy Consulting Assodates EXHIBIT "C" INSURANCE REQUIREMENTS 1. Commercial General Liability a. The Consultant shall take out and maintain, during the performance of all work under this Agreement, in amounts not less than specified herein, Commercial General Liability Insurance, in a form and with insurance companies acceptable to LAFCO. b. Coverage for Commercial General Liability insurance shall be at least as broad as the following: ISO Commercial General Liability coverage (Occurrence Form CG 000 I) c. Commercial General Liability Insurance must include coverage for the following: i. Bodily Injury and Property Damage II. Personal Injury/ Advertising Injury 111. Premises/Operations Liability d. All such policies shall give LAFCO, its Board, members of the Board, employees, and authorized volunteers insured status using ISO endorsement CG2010, CG2033, or equivalent. e. The general liability program may utilize either deductibles or provide coverage excess of a self-insured retention, subject to written approval by LAFCO. 2. Automobile Liability a. At all times during the performance of the work under this Agreement the Consultant shall maintain Automobile Liability Insurance for bodily injury and property damage including coverage for owned, non-owned and hired vehicles, in a form and with insurance companies acceptable to LAFCO. b. Coverage for Automobile Liability Insurance shall be at least as broad as: ISO Form Number CA 0001 covering automobile liability (Coverage Symbol 1, any auto). c. The automobile liability program may utilize deductibles, but not a self-insured retention, subject to written approval by LAFCO. 3. Workers' Compensation/Employer's Liability a. Consultant certifies that he/she is aware of the provisions of Section of the California Labor Code which requires every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that code, and he/she will comply with such provisions before commencing work under this Agreement. 13

26 OC LAFCO draft agreement wdh Policy Consulting Associates b. Consultant shall maintain full compensation insurance for all persons employed directly by him/her to carry out the work contemplated under this Agreement, all in accordance with the "Workers' Compensation and Insurance Act," Division IV of the Labor Code of the State of California and any acts amendatory thereof, and Employer's Liability Coverage in amounts indicated herein. Consultant shall require all subconsultants to obtain and maintain, for the period covered by the work under this Agreement, workers' compensation of the same type and limits as specified in this section. c. Such insurance shall include an insurer's Waiver of Subrogation in favor of LAFCO and will be in a form and with insurance companies acceptable to LAFCO. 4. Minimum Policy Limits Required a. The following insurance limits are required for the Agreement: Combined Sin le Limit Commercial General Liability personal Automobile Liability for bodily Employer's Liability/ Workers' Com ensation $1,000,000 er occurrence/ Statutory 5. Evidence Required a. Prior to execution of the Agreement, the Consultant shall file with LAFCO evidence of insurance from an insurer or insurers certifying to the coverage of all insurance required herein. Such evidence shall include original copies of the ISO CG 2010 (or insurer's equivalent) signed by the insurer's representative and Certificate oflnsurance (ACORD Form 25'"S or equivalent). All evidence of insurance shall be signed by a properly authorized officer, agent or qualified representative of the insurer and shall certify the names of the insured, any additional insureds, where appropriate, the type and amount of the insurance, the location and operations to which the insurance applies, and the expiration date of such insurance. 6. Required Policy Provisions a. Certificates of insurance and policy endorsements shall require 30 days ( 10 days for non-payment of premium) notice of cancellation to LAFCO. Statements that the 14

27 OC LAFCO draft agreement with Policy Consulting Associates carrier "will endeavor" and "that failure to mail such notice shall impose no obligation and liability upon the company, its agents or representatives," will not be acceptable on certificates. If any of the required coverage expires during the term of this Agreement, the Contractor shall deliver renewal certificate(s) including the General Liability Additional Insured Endorsement to LAFCO at least ten (10) days prior to the expiration date. b. The Commercial General Liability policy shall contain a prov1s10n stating that Consultant's policy is primary insurance and that any insurance, self-insurance or other coverage maintained by LAFCO or any named insureds shall not be called upon to contribute to any loss. c. The retroactive date (if any) of each policy is to be no later than the effective date of this Agreement. Consultant shall maintain such coverage continuously for a period of at least three (3) years after the completion of the work under this Agreement. Consultant shall purchase a one (1) year extended reporting period i) if the retroactive date is advanced past the effective date of this Agreement; ii) if the policy is canceled or not renewed; or iii) if the policy is replaced by another claims-made policy with a retroactive date subsequent to the effective date of this Agreement. 7. Qualifying Insurers a. All policies required shall be issued by acceptable insurance companies, as determined by LAFCO, which satisfy the following minimum requirements: b. Insurance carriers shall have a current AM Best rating of not less than "A-" policyholder's rating and a financial rating of not less than "Class VII," unless otherwise approved in advance by LAFCO. 8. Additional Insurance Provisions a. Professional Liability (Errors & Omissions): Professional Liability insurance or Errors & Omissions insurance appropriate to Consultant's profession with limits of not less than $1,000,000. Covered professional services shall specifically include all work to be performed under the Agreement and delete any exclusions that may potentially affect the work to be performed (for example, any exclusions relating to lead, asbestos, pollution, testing, underground storage tanks, laboratory analysis, soil work, etc.). If coverage is written on a claims-made basis, the retroactive date shall precede the effective date of the initial Agreement and continuous coverage will be maintained or an extended reporting period will be exercised for a period of at least three (3) years from termination or expiration of this Agreement. The foregoing requirements as to the types and limits of insurance coverage to be maintained by Consultant, and any approval of said insurance by LAFCO, is not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Consultant pursuant to this Agreement, including but not limited to, the provisions concerning indemnification. 15

28 OC LAFCO draft agreement with Policy Consulting Associates b. If at any time during the life of the Agreement, the Consultant fails to maintain in full force any insurance required by the Agreement documents LAFCO may tem1inate the Agreement. c. The Consultant shall include all subconsultants as insureds under its policies or shall furnish separate certificates and endorsements for each subconsultant. All coverages for subconsultants shall be subject to all of the requirements stated herein. d. LAFCO may require the Consultant to provide complete copies of all insurance policies in effect for the duration of the Project. e. Neither LAFCO, its Board, members of the Board, employees, or authorized volunteers shall be personally responsible for any liability arising under or by virtue of the Agreement. 16

29 ATTACHMENT B AGREEMENT FOR SERVICES BETWEEN ORANGE COUNTY LOCAL AGENCY FORMATION COMMISSION AND BERKSON ASSOCIATES This Agreement is made effective by and between ORANGE COUNTY LOCAL AGENCY FORMATION COMMISSION (hereinafter referred to as "LAFCO"), organized and operating pursuant to the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, as amended (Government Code Sections et seq.), and Berkson Associates ("Consultant"). RECITALS A. LAFCO is a public agency of the State of California and is in need of professional consultant services to perform a fiscal assessment of the alternative service options for the City of San Juan Capistrano's Utility Systems (hereinafter referred to as "the Project"). B. Consultant is qualified by virtue of experience, training, education and expertise to provide such services. C. This Agreement is to establish the terms and conditions for LAFCO to retain Consultant to provide the services described herein. AGREEMENT NOW, THEREFORE, IT IS AGREED AS FOLLOWS: l. 2. The term of this Agreement shall be eight months unless terminated in accordance with the procedures outlined in Section 15 of this Agreement. Consultant shall perform its services hereunder in a prompt and timely manner and in accordance with the timeline provided in Exhibit "A". Consultant shall provide LAFCO with the services described in the Scope of Services attached hereto as Exhibit "A."

30 OC LAFCO drafi agreement with Berkson Associates 3. a. Subject to paragraph 3(b) below, LAFCO shall pay for such services m accordance with the Schedule of Charges set forth in Exhibit "B." b. In no event shall the total amount paid for services rendered by Consultant pursuant to Exhibit "A" exceed the sum of $49, unless otherwise agreed to by both parties as outlined in Section 4. c. Prior to the bi-weekly financial mail out, Consultant shall submit to LAFCO an invoice with a statement for services itemizing the services rendered. LAFCO shall, within 30 days of receiving such invoice, review the invoice and pay all non-disputed and approved charges thereon. If the LAFCO disputes any of Consultant's fees, LAFCO shall give written notice to Consultant of any disputed fees within 15 days ofreceipt of the invoice 4. Additional Work If changes in the work seem merited by Consultant or LAFCO, and informal consultations with the other party indicate that a change is warranted, it shall be processed by LAFCO in the following manner: Consultant shall forward a letter outlining the changes to LAFCO with a statement of estimated changes in fee or time schedule. An amendment to the Agreement shall be prepared by LAFCO and executed by both parties before performance of such services or LAFCO will not be required to pay for the changes in the scope of work. Such amendment shall not render ineffective or invalidate unaffected portions of this Agreement. 5. Maintenance of Records. Books, documents, papers, accounting records, and other evidence pertaining to costs incurred shall be maintained by Consultant and made available at all reasonable times during the Agreement period and for four ( 4) years from the date of final payment under the contract for inspection by LAFCO. 6. Delays in Performance. Neither LAFCO nor Consultant shall be considered in default of this Agreement for delays in performance caused by circumstances beyond the reasonable control of the nonperforming pmiy. For purposes of this Agreement, such circumstances include but are not limited to, abnormal weather conditions; floods; earthquakes; fire; epidemics; war; riots and other civil disturbances; strikes, lockouts, work slowdowns, and other labor disturbances; sabotage or judicial restraint. Should such circumstances occur, the non-performing party shall, within a reasonable time of being prevented from performing, give written notice to the other party describing 2

31 OC LAFCO draft agreement with Berkson Associates the circumstances preventing continued performance and the efforts being made to resume performance of this Agreement. 7. Consultant shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local government. 8. Standard of Care. Consultant's services will be performed in accordance with generally accepted professional practices and principles and in a manner consistent with the level of care and skill ordinarily exercised by members of the profession cmtently practicing under similar conditions. 9. Assignment and Sub-consultant. 10. Consultant shall not assign, sublet, or transfer this Agreement or any rights under or interest in this Agreement without the written consent of LAFCO, which may be withheld for any reason. Nothing contained herein shall prevent Consultant from employing independent associates and sub-consultants as Consultant may deem appropriate to assist in the performance of services hereunder. It is agreed that Consultant shall act and be an independent contractor and is not an agent or employee of LAFCO and is not entitled to participate in any compensation plans or other benefits LAFCO provides for its employees. All services shall be performed by Consultant or under its supervision. Consultant will determine the means, methods and details of performing the services, subject to the requirements of this Agreement. Any additional personnel performing the services under this Agreement on behalf of Consultant shall also not be employees of LAFCO and shall at all times be under Consultant's exclusive direction and control. Consultant shall be responsible for all reports and obligations respecting such personnel, including but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance and workers' compensation insurance. 11. This Agreement represents the entire understanding of LAFCO and Consultant as to those matters contained herein, and supersedes and cancels any prior oral or written understanding, promises or representations with respect to those matters covered hereunder. This Agreement may not be modified or altered except in writing signed by both parties hereto. This is an integrated Agreement. 3

32 DC LAFCO draft agreement with Berkson Associates 12. Consultant shall take out and maintain, during the performance of all work under this Agreement, in amounts not less than specified herein, all insurance set forth in Exhibit C hereto, in a form and with insurance companies acceptable to LAFCO. 13. To the fullest extent permitted by law, Consultant shall defend, indemnify and hold LAFCO, its Board, members of the Board, employees, and authorized volunteers free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any alleged acts, ettors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant's services or this Agreement, including without limitation the payment of all consequential damages, expert witness fees and attorney's fees and other related costs and expenses. Notwithstanding the foregoing, to the extent Consultant's services are subject to Civil Code Section , the above indemnity shall be limited, to the extent required by Civil Code Section , to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant. In addition, Consultant shall defend, with counsel of LAFCO's choosing and, to the extent permitted by Civil Code Section , at Consultant's own cost, expense and risk, any and all claims, suits, actions or other proceedings of every kind covered by the first paragraph of this section that may be brought or instituted against LAFCO or its Board, members of the Board, employees, and authorized volunteers. Consultant shall pay and satisfy any judgment, award or decree that may be rendered against LAFCO or its Board, members of the Board, employees, and authorized volunteers as part of any such claim, suit, action or other proceeding. Consultant shall also reimburse LAFCO for the cost of any settlement paid by LAFCO or its Board, members of the Board, employees, or authorized volunteers as part of any such claim, suit, action or other proceeding. Such reimbursement shall include payment for LAFCO's attorney's fees and costs, including expe1i witness fees. Consultant shall reimburse LAFCO and its Board, members of the Board, employees, and/or authorized volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by LAFCO, its Board, members of the Board, employees, or authorized volunteers. 14. Laws, Venue, and Attorneys' Fees. This Agreement shall be interpreted in accordance with the laws of the State of California. If any action is brought to interpret or enforce any term of this Agreement, 4

33 OC LAFCO draft agreement with Berkson Associates the action shall be brought in a state or federal court situated in the County of Orange, State of California. In the event of any such litigation between the parties, the prevailing party shall be entitled to recover all reasonable costs incurred, including reasonable attorney's fees, as determined by the court. 15. Termination or Abandonment. 16. a. LAFCO has the right to terminate or abandon any portion or all of the work under this Agreement by giving ten (10) calendar days written notice to Consultant. In such event, LAFCO shall be immediately given title and possession to all original field notes, drawings and specifications, written reports and other documents produced or developed for that portion of the work completed and/or being abandoned. LAFCO shall pay Consultant the reasonable value of services rendered for any portion of the work completed prior to termination. If said termination occurs prior to completion of any task for the Project for which a payment request has not been received, the charge for services performed during such task shall be the reasonable value of such services, based on an amount mutually agreed to by LAFCO and Consultant of the portion of such task completed but not paid prior to said termination. LAFCO shall not be liable for any costs other than the charges or portions thereof which are specified herein. Consultant shall not be entitled to payment for unperformed services, and shall not be entitled to damages or compensation for termination of work. b. Consultant may terminate its obligation to provide further services under this Agreement upon thirty (30) calendar days' written notice to LAFCO only in the event of substantial failure by LAFCO o to perform in accordance with the terms of this Agreement through no fault of Consultant. Consultant shall assign Richard Berkson, as the Principal Consultant. The Principal Consultant shall not be removed from the Project or reassigned without the prior written consent of LAFCO. 5

34 OC LAFCO draft agreement with Berkson Associates 17. Any notice or instrument required to be given or delivered by this Agreement may be given or delivered by depositing the same in any United States Post Office, certified mail, and return receipt requested, postage prepaid, addressed to the following and shall be effective upon receipt thereof: LAFCO: Attn: Executive Officer LAFCO 2677 Main Street, Suite 1050 Santa Ana, CA BERKSON ASSOCIATES: Richard Berkson Berkson Associates 34 Terrace Avenue San Anselmo, CA Third Party Rights. Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than LAFCO and the Consultant. 19. Severability. The unenforceability, invalidity or illegality of any provision(s) of this Agreement shall not render the other provisions unenforceable, invalid or illegal. 20. Acknowledgment. Consultant acknowledges that by executing this agreement, Consultant is also, in good faith, determining that the appointment meets each of the requirements set forth in Government Code Section , including the unemployment insurance requirement. That is, while LAFCO is not in a position to do so, by signing the acknowledgement at the conclusion of this agreement, the Consultant is certifying it has not received unemployment insurance payments within the past 12 months arising from work performed as a retiree for any public employer. Further, LAFCO has no way of monitoring the hours that Consultant works for another OCERS employer. As such, it is the responsibility of the Consultant to ensure that the total hours worked for LAFCO and any other OCERS employer do not exceed 960 hours in the aggregate during the fiscal year. II [SIGNATURE PAGE FOLLOWS] 11 II II 6

35 OC LAFCO draft agreement with Berkson Assodates IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. ORANGE COUNTY LOCAL AGENCY FORMATION COMMISSION BERKSON ASSOCIATES Approved as to form: General Counsel, Orange County Local Agency Formation Commission 7

36 OC LAFCO draft agreement wuh Berkson Associates EXHIBIT "A" SCOPE AND SCHEDULE OF SERVICES Task 1: Data Gathering and Document Review Richard Berkson of Berkson Associates will meet with LAFCO staff, City representatives and the Infrastructure Assessment Consultant to discuss the project Scope of Work, refine objectives, process, products and timeline as part of Project kick-off. The discussion will establish key contacts and communication protocols, and identify initial documents and reference materials, and any other required information. Coordination with the Team preparing the Infrastructure Assessment will be discussed to assure that the Assessment addresses issues important to the Fiscal Assessment, and to arrange ongoing coordination and exchange of information. The following objectives will be accomplished at this meeting: Confirm project objectives, Define project roles distribute project roster, and provide contact information for key personnel for City and potential successor agencies Discuss list of any additional data needed for completion of the study, Review schedule project milestones, and Distribute project management plan. Additionally, the Consultants will discuss the following with the City: Identify and discuss City issues or concerns regarding existing conditions or known system deficiencies and potential future issues, and Review approach for defining the utility system performance criteria. Materials to be reviewed include but are not limited to: Documents in Exhibit A of the RFP, including documents from the alternative providers and any relevant LAFCO MSRs prepared for the alternative providers. Any other City policy and procedure documents applicable to sewer and water operations and financial procedures. For example, asset management plans; credit rating documents; staff reports related to sewer/water issues, and relevant board agenda/minutes. Demographic information and forecasts of City residents, land use and employment, and City assessed value. Current budget and financial documents, including staff by position and responsibility, salary and benefits. Cost allocations of City costs to the utilities. Existing agreements between the City and other agencies. A project kick-off meeting should occur approximately two to three weeks following project initiation, after Berkson Associates has had an opportunity to review available materials and prepare follow-up questions. 8

37 OC LAFCO draft agreement with Berkson Associates Task 2: Fiscal Assessment of City of San Juan Capistrano's Water and Wastewater Utilities The purpose of the focused MSR is at least two-fold: first, the MSR will provide information needed by LAFCO to make findings required for SOI changes and any reorganization that may occur to the City's sewer and water services; and secondly, to provide data important to considerations by potential alternative service providers. The MSR data and analysis will be refined and expanded if and when an alternative provider submits an application and Plan for Services to serve the area. The MSR will not audit financial operations or conditions, or recommend changes to current practices, unless the recommendations are a logical outcome of the MSR review. Although the RFP indicates that LAFCO staff will prepare MSR determinations, the MSR will include analysis required to suppo11 the determinations. For example, the MSR will include measures of efficiency, transparency, accountability, etc. The MSR will summarize and document financial conditions and "measurements" as listed in the RFP. To the extent possible, these measures will be summarized in a table comparing data measures to alternative service providers. Past financial trends and current conditions for measures will include, but are not limited to (depending on data available for alternative providers): Operating revenues and rates. Service expenditures (actual vs. optimum, if known), measure per unit, per acre, or other standard measure. Deferred maintenance. Capital expenditures to address any capacity expansion, repair and replacement, and deferred maintenance. Debt service obligations, amounts, and schedules. Capital revenues and sources (e.g., reserves, grants, etc.) Other administrative and management expenditures. Operating and capital reserves (their adequacy and consistency with City reserve policies). Berkson Associates will coordinate with the consultant preparing the infrastructure assessment to confirm CIP needs (estimated at $50 million) and timing. Any other capital and/or operating needs identified by the infrastructure assessment will be documented, as these may become future obligations of the City and/or an alternative provider, and will affect fiscal projections. To the extent possible, the infrastructure consultants should identify the staffing changes and operating costs associated with any future capital improvements or other anticipated or recommended operational changes. These costs can then be integrated into the budget forecast. The infrastructure consultants should also report on estimates of future changes in sewer and water demand. A ten-year forecast will be prepared based on the preceding analysis. The forecast will be prepared in a summary fashion, generally following the structure provided in the rate study 9

38 OC LAFCO draft agreement with Berkson Assodates prepared for the City (Raftelis, 2014 ). The forecast will be prepared for a base "mid-point" scenario; any additional scenarios may require a need for additional contingency funds beyond the budget proposed for this work scope. Although financial scenarios won't be forecast, the text can identify risk factors, opportunities, and financial implications, as well as possible measures that could mitigate against adverse impacts. Implications for future rates and other funding sources will be described. Any potential cost risks (e.g., pending legal claims, regulatory requirements) will be documented. Various grants may be available to help fund improvements; this Scope does not include research related to grant opportunities, however, the analysis will include any likely sources identified by the City. Task 3: Fiscal Assessment of Alternative Providers The MSR will evaluate options for transfer of the sewer and water systems. Options identified to-date include: a. Transfer of the City's water and wastewater operations and facilities wholly to a single agency. b. Transfer of the City's water and wastewater operations and facilities to multiple service providers. c. Contractual service agreements. d. Other jurisdictional options as identified by consultant. At this point, no other options are anticipated as requiring significant review and analysis, although they can be listed as possibilities. As noted in the prior task, the MSR will provide summary tables, to the extent possible, comparing current operations to the options for key measurement items supportive of MSR findings. The comparison will identify potential cost savings, for example, if the agency providing services can take advantage of economies of scale to provide services without a proportionate increase in staff. Because the MSR focuses on the City's systems, the same level of detail, for example related to deferred maintenance, complaints and responses, etc., may not be readily available for the alternative service providers; however, the MSR will include as many key measures as possible. If a reorganization moves ahead, focused analysis on the alternative provider can be conducted by LAFCO and the provider. Where feasible and practical, the review of alternative providers will consider criteria listed on the City's website (Criteria for Evaluating a Potential Change in Utility Organization, 8/30/16). The review will focus on financial criteria that are the subject of the current study, however, other criteria will be briefly discussed to the extent that data is readily available. In addition to the question of cost effectiveness and benefits to rate payers, the MSR will identify other potential benefits of a reorganization with a given service provider; for example, the MSR will note potential access to lower cost financing, advanced technology and operating systems, and staff expertise not otherwise currently available to the City's systems. Task 4a: Draft and Final Report 10

39 OC LAFCO draft agreement with Berkson Associates The report will provide an overview and summary, and appendices as needed to document the calculations and analysis. The report will be provided electronically as an Adobe Acrobat PDF; the report also will be provided in a Microsoft Word format to facilitate redlines and comments. Spreadsheet tables will be transmitted in PDF format and inserted into the word document. BA will prepare an Administrative Draft Report for review by LAFCO and other key individuals. If scheduling allows, it is recommended that the City and the alternate providers review and comment on the factual accuracy of selected report selections in advance of public release; this process can help reduce subsequent technical issues and comments by resolving them prior to public document distribution. A Public Review Draft Report will integrate comments and changes to the administrative draft report. This rep01i will be intended for broader public distribution and review, and will be the basis for a presentation at a LAFCO hearing. After the LAFCO hearing and receipt of additional comments, BA will prepare a final report. The report will integrate comments, but no formal "response to comments" will be prepared. To the extent that comments require preparation of responses separate from document edits, the additional time may require the use of contingency funds beyond those provided in the current budget. Task 4b: Meetings Up to three in-person meetings are assumed, including a kick-off meeting, a LAFCO Workshop, and one LAFCO hearing. Additional meetings can be scheduled, and would be billed on a ''time and materials" basis. Up to three conference calls are included in the budget. Mr. Berkson is also available as needed for ad hoc phone calls to discuss topics that may arise during the course of the Study. PROJECT COMPLETION SCHEDULE Berkson Associates proposes to adhere to the schedule listed in the RFP, assuming that the contract is effective in December as anticipated, and that requested information if provided in a timely manner. The schedule may also change if unanticipated issues arise or the scope is modified. Timely completion requires close integration with the Infrastructure Assessment. This scope proposes that the kick-off meeting include discussion of coordination between the two assessments. Time will be required to review the draft infrastructure report and integrate its findings into the fiscal report. The schedule below assumes that preliminary findings of the infrastructure assessment are available for review by Berkson Associates prior to the release of a draft infrastructure assessment report (by the date specified in the infrastructure assessment RFP), or else the schedule may need to be extended to assure adequate fiscal review, particularly if any of the analysis or findings of the infrastructure assessment are modified subsequent to Berkson Associates' review. 11

40 OC LA FCO draft agreement with Berkson Associates Following is a proposed schedule, which assumes that information and responses to Berkson Associates questions, and review of preliminary documents, are provided in a lime l.y manner. MILESTONE DATE Contract Effective Dat e Fisca l Assessment - Review of Documents Kick Off M eeting* Review of Infrastructure Assessment Draft Fiscal Assessment Administrative Draft Comments from LAFCO and City received on Fiscal Assessment by Fiscal Assessment Fin al Administrat ive Draft LAFCO Study Session Presentation l Revised Report, if applica ble I LAFCO Regu lar M eeting ] M id-dec Mid-Dec to Mid- Jan Week of January 3rd By 3/12/18 4/16/18 4/30/18 5/14/18 6/13/18 6/27/18 7/11/18 12

41 OC LAFCO draft agreement with Berkson Associates EXHIBIT "B" SCHEDULE OF CHARGES/PAYMENTS Task 1: Data Gathering and Document Review Task 2: Fiscal Assessment of City Utilities Task 3: Fiscal Assessment of Alternative Providers Task 4a: Draft and Final Report Task 4b: Meetings and Presentations Direct Expenses* Subtotal Additional Analysis & Support $ 4,500 12,000 18,000 10,000 4,000 1,200 $49,700 tbd * The budget assumes a maximum of three trips for meetings or presentations. Additional meetings or services can be scheduled and will be billed on a "time and materials" basis at an hourly rate of $225/hour plus expenses in a total amount not to exceed 10% of the total compensation or $54,670. No costs are included for data acquisition - proposal assumes that LAFCO will provide demographic data and projections that would otherwise require up to $500 data acquisition budget. Reports to be provided in electronic format only. Consultant shall submit statements for services to LAFCO pursuant to paragraph 3( c) for the life of the Project or termination of the Agreement pursuant to paragraph l 5(a). Statements for services shall itemize charges as they relate to the completion of tasks defined in Exhibit A. Statements for services shall reflect only the actual hours incurred in performing the services under this Agreement, in accordance with the fee schedule set forth in this Exhibit B, and subject provisions of Section 3 of this agreement. 13

42 EXHIBIT "C" INSURANCE REQUIREMENTS 1. Commercial General Liability a. The Consultant shall take out and maintain, during the performance of all work under this Agreement, in amounts not less than specified herein, Commercial General Liability Insurance, in a form and with insurance companies acceptable to LAFCO. b. Coverage for Commercial General Liability insurance shall be at least as broad as the following: ISO Commercial General Liability coverage (Occurrence Form CG 0001) c. Commercial General Liability Insurance must include coverage for the following: 1. Bodily Injury and Property Damage 11. Personal Injury/ Advertising Injury iii. Premises/Operations Liability d. All such policies shall give LAFCO, its Board, members of the Board, employees, and authorized volunteers insured status using ISO endorsement CG2010, CG2033, or equivalent. e. The general liability program may utilize either deductibles or provide coverage excess of a self-insured retention, subject to written approval by LAFCO. 2. Automobile Liability a. At all times during the performance of the work under this Agreement the Consultant shall maintain Automobile Liability Insurance for bodily injury and property damage including coverage for owned, non-owned and hired vehicles, in a form and with insurance companies acceptable to LAFCO. b. Coverage for Automobile Liability Insurance shall be at least as broad as: ISO Form Number CA 0001 covering automobile liability (Coverage Symbol I, any auto). c. The automobile liability program may utilize deductibles, but not a self-insured retention, subject to written approval by LAFCO. 3. Workers' Compensation/Employer's Liability a. Consultant certifies that he/she is aware of the provisions of Section of the California Labor Code which requires every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that code, and he/she will comply with such provisions before commencing work under this Agreement. 14

43 OC LAFCO draft agreement with Berkson Associates b. Consultant shall maintain full compensation insurance for all persons employed directly by him/her to carry out the work contemplated under this Agreement, all in accordance with the "Workers' Compensation and Insurance Act," Division IV of the Labor Code of the State of California and any acts amendatory thereof, and Employer's Liability Coverage in amounts indicated herein. Consultant shall require all subconsultants to obtain and maintain, for the period covered by the work under this Agreement, workers' compensation of the same type and limits as specified in this section. c. Such insurance shall include an insurer's Waiver of Subrogation in favor of LAFCO and will be in a form and with insurance companies acceptable to LAFCO. d. Consultant further certifies and acknowledges that he/she has no employees and that he/she will not employ any person(s) in the work to be performed for LAFCO under this Agreement. With no employees, Consultant further acknowledges that he/she is not subject to the Workers' Compensation Act of the State of California. By execution of this Agreement, Consultant hereby agrees to notify LAFCO in writing, prior to hiring any person(s ), full time or part time, to assist in this Agreement and to secure workers' compensation insurance prior to any person beginning work or assisting in the performance of work under this Agreement. 4. Minimum Policy Limits Required a. The following insurance limits are required for the Agreement: Combined Sin le Limit Commercial General Liability personal Automobile Liability for bodily Em layer's Liability/ Workers' Compensation Not Applicable - No em loyees 5. Evidence Required a. Prior to execution of the Agreement, the Consultant shall file with LAFCO evidence of insurance from an insurer or insurers certifying to the coverage of all insurance required herein. Such evidence shall include original copies of the ISO CG 2010 (or insurer's equivalent) signed by the insurer's representative and Certificate of Insurance (ACORD Form 25-S or equivalent). All evidence of insurance shall be signed by a 15

44 OC LAFCO draft agreement with Berkson Associates properly authorized officer, agent or qualified representative of the insurer and shall certify the names of the insured, any additional insureds, where appropriate, the type and amount of the insurance, the location and operations to which the insurance applies, and the expiration date of such insurance. 6. Required Policy Provisions a. Ce1iificates of insurance and policy endorsements shall require 30 days (10 days for non-payment of premium) notice of cancellation to LAFCO. Statements that the carrier "will endeavor" and "that failure to mail such notice shall impose no obligation and liability upon the company, its agents or representatives," will not be acceptable on certificates. If any of the required coverage expires during the te1m of this Agreement, the Contractor shall deliver renewal certificate(s) including the General Liability Additional Insured Endorsement to LAFCO at least ten (10) days prior to the expiration date. b. The Commercial General Liability policy shall contain a prov1s10n stating that Consultant's policy is primary insurance and that any insurance, self-insurance or other coverage maintained by LAFCO or any named insureds shall not be called upon to contribute to any loss. c. The retroactive date (if any) of each policy is to be no later than the effective date of this Agreement. Consultant shall maintain such coverage continuously for a period of at least three (3) years after the completion of the work under this Agreement. Consultant shall purchase a one (1) year extended reporting period i) if the retroactive date is advanced past the effective date of this Agreement; ii) if the policy is canceled or not renewed; or iii) ifthe policy is replaced by another claims-made policy with a retroactive date subsequent to the effective date of this Agreement. 7. Qualifying Insurers a. All policies required shall be issued by acceptable insurance companies, as determined by LAFCO, which satisfy the following minimum requirements: b. Insurance carriers shall have a cmtent AM Best rating of not less than "A-" policyholder's rating and a financial rating of not less than "Class VII," unless otherwise approved in advance by LAFCO. 8. Additional Insurance Provisions a. Professional Liability (Errors & Omissions): Professional Liability insurance or Errors & Omissions insurance appropriate to Consultant's profession with limits of not less than $1,000,000. Covered professional services shall specifically include all work to be performed under the Agreement and delete any exclusions that may potentially affect the work to be performed (for example, any exclusions relating to lead, asbestos, pollution, testing, underground storage tanks, laboratory analysis, soil work, etc.). If coverage is written on a claims-made basis, the retroactive date shall precede the effective date of the initial Agreement and continuous coverage will be maintained or an extended reporting period will 16

45 OC LAFCO draft agreement with Berkson Associates be exercised for a period of at least three (3) years from termination or expiration of this Agreement. The foregoing requirements as to the types and limits of insurance coverage to be maintained by Consultant, and any approval of said insurance by LAFCO, is not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Consultant pursuant to this Agreement, including but not limited to, the provisions concerning indemnification. b. If at any time during the life of the Agreement, the Consultant fails to maintain in full force any insurance required by the Agreement documents LAFCO may terminate the Agreement. c. The Consultant shall include all subconsultants as insureds under its policies or shall furnish separate certificates and endorsements for each subconsultant. All coverages for subconsultants shall be subject to all of the requirements stated herein. d. LAFCO may require the Consultant to provide complete copies of all insurance policies in effect for the duration of the Project. e. Neither LAFCO, its Board, members of the Board, employees, or authorized volunteers shall be personally responsible for any liability arising under or by virtue of the Agreement. 17

46 LOCAL AGENCY FORMATION COMMISSION GE COUNTY AFCO EST 1963 December 13, 2017 ORANGE COUNTY 9b CHAIR DEREK J. MCGREGOR Represent.1tlve or Generi.11 Public VICE CHAIR D R. ALLAN BERNST'EIN Counc1/membe1 City or Tustin To: From: Subject: Local Agency Formation Commission Executive Officer Policy Analyst Legislative Report (December 2017) LISA 8ARTLE1T Supervisor 5 D1smct CHERYL BROTHERS Counc11member City or Fountiln Villley TODD SPITZER SupeMsor 3'" D1slflct CHARLEY WILSON Dlrecro1 Sc1ma M,1rgarim Wmer D1w1ct JOHN WITHERS Directo1 //Vine R,1nch Wi te1 D1str1e1 AL.TFRNATE WENDY 8UCKNUM Councllmemoer City of M1ss10n V~o AL.TERNATE JAMES FISLER D1rect0t M~l Water D1S(llC( AL.TERNATE Lou PENROSE Reprcscntmlve of Grneml Public AL.TERNA TE M ICHELLE STEEL Supe1v1sor 2'" DISlflCI CAROLYN EMERY Execu(IVe Ottice1 BACKGROUND During FY , the first year of a two-year legislative session, a total of 2,980 bills were introduced of which 1,189 were chaptered. This Legislative Report provides a brief overview oflegislation supported by the Commission during the FY session and a summary of the LAFCO-relatcd recommendations made by the Little Hoover Commission (LHC). This report also identifies topics expected to be covered by proposed legislation for the upcoming legislative session and outlines the changes made in the restructuring of the California Association of Local Agency Formation Commissjon's (CALAFCO) Legislative Comrnittee. As the deadline for introducing legislation for the FY session is February 16, 2018, a summary of proposed legislation will be provided in the next legislative update, which is scheduled for February THE WRAP-UP OF LEGISLATIVE SESSION During the FY session, the Commission adopted support and watch positions on 10 bills considered by the Legislature. Some of the topics of LAFCO interest included: the restoration of the Vehicle License Fee (VLF) funding to four cities that incorporated between January 1, 2004 and January 1, 2012 in the County of Riverside; technical corrections to the Cortese-Kn.ox-Hertzberg Local Government Act of 2000 (CKH Act) via the aru1ual Omnibus Bill; streamlining the process of seating special districts on LAFCOs; and updating the definition for disadvantaged communities. (See Attachment A) In addition to monitoring the FY legislative session, CALAFCO, in collaboration with LAFCOs, was highly involved in discussions with the Little Hoover Commission (LHC) to provide information on the role of LAFCOs and special districts throughout the State. These discussions, which took place over the course of a year, included two 2677 Norltl Main Slieet. Suite I 050, Santa Ana. CA (714) rax(/ 14) htlp//

47 Legislative Report (December 2017) December 13, 2017 Page 2 of 5 public hearings and two roundtable events. Subsequently, the Commission released its report entitled "Special Districts: Improving Oversight and Transparency." The final report includes 20 recommendations, eight of which are directly related to LAFCOs. These recommendations focus on special district oversight and transparency, the role of healthcare districts, and preparing for climate change. (See Attachment B) PREVIEW OF EXPECTED LEGISLATION FOR FY When the Legislature reconvenes on.january 1, 2018, CALAFCO and LAFCOs expect that there will be new legislation introduced directly impacting LAFCO and others of LAFCO interest. For example, over the past several years, restoring the vehicle license for recently incorporated cities has been a key subject of proposed legislation. With this recent success involving the Riverside cities, continued discussions and efforts to introduce legislation to provide the same type of financial support for future incorporations and annexations are anticipated. Additionally, LAFCOs expect legislation to address the following topics: water service delivery, municipal services to disadvantaged communities, transparency of public agencies, role of healthcare districts, implementation of the LHC's report recommendations, and proposed minor or non. substantive changes to the CKH Act via the annual Omnibus Bill. The CALAFCO Legislative Committee will identify its recommended legislative priorities for the upcoming year during its meeting on December 15, Subsequently, those proposed legislative priorities will be considered by the CALAFCO Board and the approved priorities will be incorporated in the Commission's February legislative report. CALAFCO LEGISLATIVE-ADVISORY COMMITTEE During the Fall of every year, the CALAFCO Board reviews its Legislative Policies and appoints the members of the CALAFCO Legislative Committee. This year, the Board opted to restructure the Committee by reducing the number of members to 16 appointed voting members and 10 alternate voting members. The voting members include: five Board Members, eight voting staff members, and three legal counsel voting members. Additionally, the Board created a Legislative Advisory Committee consisting of LAFCO staff and legal counsel volunteers who are not voting or alternate members of the Legislative Committee. The purpose of the Advisory Committee is to assist the Legislative Committee on legislation or legislative projects throughout the year. The CALAFCO Board will consider board member appointments to the Committee at its December 8 meeting. The following staff members will represent the Southern Region: Paul Novak, Executive Officer - Los Angeles LAFCO (voting member) George Spiliotis, Executive Officer - Riverside LAFCO (voting member) Kathleen Rollings-McDonald - San Bernardino LAFCO (alternate member) Robert Barry, Chief Analyst - San Diego LAFCO (advisory committee)

48 Legislative Report (December 2017) December 13, 2017 Page 3 of 5 Sam Martinez, Assistant Executive Officer, San Bernardino LAFCO (advisory committee) Luis Tapia, Policy Analyst - Orange LAFCO (advisory committee) RECOMMENDATION Staff recommends that the Commission: 1. Receive and file the December 13, 2017 Legislative Report. Respectfully Submitted, I ~.. LUIS TAPIA

49 Legislative Report (December 2017) December 13, 2017 Page 4 of 5 ATTACHMENT A AB 1725 M inor and/ or non-substantive ch anges to the Cortese Knox-Ilertzberg Reorganization Act that clarifies and provides consistency in how the CKII Act is applied throu hout the state. Support Signed by the Governor September 28, AB464 Amends Government Code Section by requesting that a p lan submitted for a proposed organization or reorganization must include information regarding services currently provided to the affected territory and an services that will be extended to the affected territo Support Signed by the Governor July 10, AB979 Ame nds Code Section by redefining the process for seating sp ecia l districts on LAFCO. Support Signed by the Governor September 1, AB 577 Amends the current definition for a disadvantaged community under Code Section to a lso include "a community with less than 80% of the statewide am1ua l per cap ita income" as part of the definition of a disadvantaged communit. Watch Pailed to pass Fiscal Committee. SB 206, 207, 208 The Validating Acts are meant to cure typographkal, grammatical, and p rocedural errors that might invalida te bounda ry changes or bond issues. The acts a rc not meant to for ive fraud, corru Lion, or unconstitutiona l acts. Support Signed by the Governor July 10, 20J 7. SB 130 Reinstates the "Vehicle License Fee" revenue tha t was removed throu gh the enactment of SB 89 for cities tha t incorpora ted be tween January 1, 2004 a nd Ja nuary 1, The bill will apply to four cities in Riverside County: City of Wildomar, City of Menifee, City of Eastvale, and C ity of Juru a Valle. Support Signed by the Governor May 12, SB 634 A legislative consolidation of two water districts, bypassing the Los Angeles LAFCO's procedure and oversight authority provided by the Cortese-Knoxllertzber Local Government Reor anization Act of Watch Signed by the Governor October 5, SB448 Requires the Stale Controller to publish a List of inactive special districts and establishes a process for LAFCOs to dissolve inactive special districts. For m ore information on each bill visit htt Watch Signed by the Governor September 27, ov

50 Legislative Report (December 2017) December 13, 2017 Page 5 of 5 ATTACHMENT B Recommendations Related to LAFCOs 1. The Legislature and the Governor should"curtail a growing practice of enacting bills lo override LAFCO deliberative processes and decide local issues regarding special district boundaries and o eration. 2. The Legislature should provide one-time grant funding to pay for specified LAFCO activities, to incentivize LAFCOs or smaller special districts to develop and implement dissolution or consolidation plans with limelines for expected outcomes. Funu.ing should be tied to process com letion and results. Includin enforcement authori for corrective action and consolidation. 3. The Legislature should enact and the Governor should sign SB 448 (Wieckowski) which would provide LAFCOs the statutory authority to conduct reviews of inactive districts and to dissolve them without the action of bein sub'ect to retest and a costl election recess. 4. The Governor should sign AB 979 (Lackey), co-sponsored by the California Special Districts Association and the California Association of Local Agency Formation Commission. The bill would strengthen LAFCOs by casing a process to add special district representatives to the 28 county LAFCOs where districts have no choice. 5. The Legislature should adopt legislation to give LAFCO members fixed terms, to case political ressures in controversial voles and enhance the inde endence of LAFCOs. 6. The Legislature should convene an advisory committee to review the protest proves for consolidation and dissolutions of special districts and to develop legislation to simplify and create consistenc in the recess. 7. Every LAFCO should have a website that includes a list and links to all of the public agencies with.in each coun service areas and a co of all of the most current Munici al Service Reviews. 8.The Legislature, which has been increasingly incjined to override local LAFCO processes to press changes on healthcare districts, should defer these decisions to LAFCOs, which in statue already have that res onsibili. For more information on the Little Hoover Commission's Report visit