HomeMy WebLinkAboutContracts & Agreements_99-2004_CCv0001.pdf AGREEMENT TO PROVIDE PROFESSIONAL SERVICES FOR
THE 2004 WATER AND WASTEWATER RATES AND CHARGES STUDY
INCLUDING THE UTILITIES ADVISORY COMMITTEE.
This Agreement is made and entered into this 6th day ofJuly, 2004 by and between the City of
Redlands, a municipal corporation (hereinafter "City") and Raftelis Financial Consultants, Inc.
hereinafter ("Consultant").
In consideration of the mutual promises contained herein City and Consultant agree as
follows:
ARTICLE I - ENGAGEMENT OF CONSULTANT
1.1 City hereby engages Consultant to perform professional services in connection with City's
preparation of its 2004 Water and Wastewater Rates and Charges Study (the "Services").
1.2 The Services shall be perfon-ned by Consultant in a professional manner, and Consultant
represents that it has the skill and the professional expertise necessary to provide the Services
to City at a level of competency presently maintained by other practicing professional
consultants in the industry providing like and similar types of services.
ARTICLE 2 - SERVICES OF CONSULTANT
2.1 The Services which Consultant shall perform are described in Consultant's Exhibit"A"entitled
"Scope of Services"which is attached hereto and incorporated herein by this reference.
2.2 Consultant shall comply with all applicable Federal,State and local rules,laws and regulations
in the performance of this Agreement including but not limited to all applicable Labor Code
and prevailing wage laws commencing at California Labor Code section 1770 et seq.and non-
discrimination laws including the Americans' with Disabilities Act.
2.3 Consultant ffirther understands that if it violates the provisions of the California Labor Code
relating to prevailing wage, that City may enforce the California Labor Code by notice of the
withholding of contract payments to Consultant or Subcontractor pursuant to labor Code
sections 1726, 1727 and 1771.6.
2.4 If Consultant executes an agreement with a subcontractor to perform any portion of the
Services, Consultant. shall comply with California Labor Code section 1775 mid 1777.7
including providing the subcontractor with copies of the provisions of Sections 1771, 1775,
1776, 1777.5, 1813 and 1815 of die Labor Code. Consultant acknowledges that the statutory
provisions for penalties for failure to comply pith state wage and hour laws and to pay
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prevailing wages may be enforced by the City pursuant to Labor Code sections 1775 and 1813.
ARTICLE 3 - RESPONSIBILITIES OF CITY
3.1 City shall make available to Consultant information in its possession that is relevant to the
performance ofConsulGant's Services.
3.2 City will provide access to City-owned property to perform the Services.
3.3 City designates Doug Headrick to act as its representative with respect to the Services to be
performed under this Agreement.
ARTICLE 4- PERIOD OF SERVICE
4.1 Consultant shall perform the Services in a prompt and diligent manner and shall complete the
Services not later than six (6) months from the date of the issuance of the Notice to Proceed
from City to Consultant.
ARTICLE 5- PAYMENTS TO THE CONSULTANT
5.1 The total compensation for Consultant's performance of the Services shall not exceed the
amount of$54,000. City shall pay Consultant on a time and materials basis up to the not to
exceed amount, in accordance with Exhibit "C" entitled "Consulting Fee," based upon the
hourly rates shown in Exhibit"C."
5.2 Consultant shall bill City within ten days following the close of each month by submitting an
invoice indicating the portion of the Services performed,who performed the Services,indirect
costs,and the detailed cost of all Services including backup documentation. Payments by City
to Consultant shall be made within 30 days after receipt and approval of Consultant's invoice.
5.3 All notices,bills and payments shall be made in writing and may be given by personal delivery
or by mail. Notices, bills and payments sent by mail shall be addressed as follows:
City of Redlands
Doug Headrick, Chief of Water Sudhir Pardiwala
ResourcesMunicipal Utilities Dept, Raftelis Financial Consultants
PO Box 3005 201 S. Lake, Ste 803
Redlands, CA 9237/3 Pasadena, CA 91101
When so addressed, such notices shall be deemed given upon deposit in the United States Mail.
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Changes may be made in the names and addresses of the person to whom notices and payments are to
be given by giving notice pursuant to this paragraph.
ARTICLE 6 - INSURANCE AND INDEMNIFICATION
6.1 Consultant's Insurance to be Primary
All insurance required by this Agreement shall be maintained by Consultant for the duration of
this Project and shall be primary with respect to City and non-contributing to any insurance or self-
insurance maintained by City. Consultant shall not perform any Services pursuant to this Agreement
unless and until all required insurance listed below is obtained by Consultant. Consultant shall provide
City with Certificates of Insurance and endorsements evidencing such insurance prior to
commencement of work. All insurance policies shall include a provision prohibiting cancellation of
the policy except upon thirty (30) days prior written notice to City.
6.2 Workers' Compensation and Employer's Liability
A. Consultant shall secure and maintain Workers' Compensation and Employer's
Liability insurance throughout the duration of this Agreement in amounts which meet statutory
requirements with an insurance carrier acceptable to City.
B. Consultant expressly waives all rights to subrogation against City, its elected officials,
employees and volunteers for losses arising from work performed by Consultant for City by expressly
waiving Consultant's immunity for injuries to Consultant's employees and agrees that the obligation to
indemnify,defend and hold harmless provided for in this Agreement extends to any claim brought by
or on behalf of any employee of Consultant. This waiver is mutually negotiated by the parties. This
shall not apply to any damage resulting from the sole negligence of City,its agents and employees. To
the extent any of the damages referenced herein were caused by or resulted from the concurrent
negligence of City,its agents or employees,the obligations provided herein to indemnify,defend and
hold harmless is valid and enforceable only to the extent of the negligence of Consultant,its officers,
agents and employees.
6.3 Comprehensive General Liability Insurance. Consultant shall secure and maintain in force
throughout the duration of this Agreement comprehensive general liability insurance with carriers
acceptable to City. Minimum coverage of one million dollars ($1,000,000) per occurrence and two
million dollars ($2,000,000) aggregate for public liability, property damage and personal injury is
required. Consultant shall obtain an endorsement that City shall be named as an additional insured.
6.4 Professional Iaiability Insurance. Consultant, shall secure and maintain professional liability
insurance throughout the duration of this Agreement in the amount of one million dollars
($1,000,000) per occurrence and two million dollars ($2,000,000) annual aggregate.
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6.5 Business Auto Liability Insurance; Consultant shall have business auto liability coverage,with
minimum limits of one million dollars { 1,000,000)per occurrence,combined single limit for bodily
injury liability and property damage liability. This coverage shall include all Consultant-owned vehicles
used in connection with the Services, hired and non-owned vehicles, and employee nein-ownership'
vehicles. Consultant shall obtain an endorsement that City shall be;named as an additional insured.
6.6 Assignment and Insurance Requirements. Consultant is expressly prohibited from assigning
any of the Services without the express prior written consent of City. In the event of mutual agreement
between the parties to assign a portion of the. Services, Consultant shall add the assignee as an
additional insured and provide City with the insurance endorsements prior to any Services being`
performed by the subcontractor. Assignment does not include printing or other customary
reimbursable expenses that may be provided in this Agreement*
6.7 Held Ha nicss and Indemnification. Consultant shall defend,indemnify and hold harmless
City,its elected officials„officers,employees and agents,from and against any and all actions,claims,
demands,lawsuits,losses and liability for damages to persons or property,including costs and attorney
fees,that may be asserted or claimed by any person,firm,entity,corporation,political subdivision or
other organization arising out of or in connection with Consultant's negligent and/or intentionally
wrongful acts or omissions under this Agreement, but excluding such actions, claims, demands,
lawsuits and liability for damages to persons or property arising from the sole negligence or
intentionally wrongful acts of City,its officers,employees or agents.
ARTICLE 7-GENERAL CONSIDERATIONS
7.1 In the event any action is commenced to enforce or interpret any of the terms or conditions of
this Agreement the prevailing party shall,in addition to any costs and other relief,be entitled to
the recovery of its reasonable attorneys'fees.
7.2 All documents,records,drawings,designs,cost estimates,electronic data files,databases,and
other documents developed by Consultant pursuant to this Agreement and any copyright
interest in said above described documents, shall become the property of City and shall be
delivered to City upon completion of the Services,or upon the request of City. Any reuse of
such documents and any use of incomplete documents will be at City's sale risk:
7.3 Consultant is for.all purposes an independent contractor. Consultant shall supply all tools and
instrumentalities required to perform the Services. All personnel employed by Consultant are
for its account only, and in no event shall Consultant or any personnel retained by it be
deemed'to have been employed by City or engaged by City for the account of or can behalf of
City.
7.4 Unless earlier terminated; as provided for below, this Agreement shall terminate upon
completion and acceptance of the Services by City.
7.5 This Agreement may be terminated by either party, ,vithout cause,by providing seven(7)days
prior written notice to the other party(delivered by certified mail,return receipt requested) of
intent to terminate.
7.6 If Agreement is terminated by City, an adjustment to Consultant's compensation shall be
made,but no amount shall be allowed for anticipated profit or unperformed Services,and any
payment due Consultant at the time of termination may be adjusted to the extent of any
additional costs to City occasioned by any default by Consultant.
7.7 Upon receipt of a termination notice from City, Consultant shall discontinue all Services and
deliver or otherwise make available to City, copies (in both hard copy and electronic form,
where applicable) of any data,design calculations,drawings,specifications,reports,estimates,
summaries and such other information and documents that may have been prepared or
assembled by Consultant in performing the Services.
7.8 Consultant shall maintain books, payroll costs and all expenses associated with the Services.
Such books shall be available at all reasonable times for examination by City at the office of'
Consultant.
7.9 This Agreement, including the attachments incorporated herein by reference,represents the
entire agreement of the parties as to the matters contained herein,and any prior negotiations,
written proposals or oral agreements,relating to the subject matter hereof are superseded by
this Agreement. Any amendment to this Agreement shall be in writing, approved by City
Council of City and signed by City and Consultant.
7.10 This Agreement shall be governed by and construed in accordance with the laws of the State of
California.
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IN WITNESS WHEREOF, duly authorized representatives of City and Consultant have
signed in confirmation of this Agreement.
City of Redlands Raftelis Financial Consultants,Inc.
By: y.
usan Peppler
Mayor
Attest:
Cityj2ferk, City of giods,
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ATTACHMENT A
SCOPE OF SERVICES
Based on our understanding of the City's Request for Proposals (RFP) and discussion with
City staff, we propose the following tasks to address the City's needs.
General and Administrative
Task 1 —Project Management
This project component includes general project coordination, staff direction, and
administrative activities throughout the course of the project. Specific subtasks are:
1.1 Coordinate project activities among RFC staff and City staff. Provide direction
to staff as required to meet project objectives and deadlines. Ensure adequate
levels of staff and resources throughout the course of the project. Review all
study-related work and provide overall quality assurance.
1.2 Perform general administrative duties, including client correspondence, billing,
and project documentation.
Task 2 —Project Initiation Meeting and Data Collection
This project component will provide opportunity to establish lines of communication; review
project missions, goals, and objectives; review project schedule and major milestones; collect
pertinent data for the study, and discuss any relevant background information. The session
will also facilitate discussions of the overall approach and strategies that will be used by the
City and RFC during the course of the project. Specific subtasks are:
2.1 Prepare an initial request for billing, financial and operational data and other
pertinent information needed prior to the first meeting with City staff. A list of
typical data required for the study will be provided before the first meeting.
2.2 Obtain and review the data and determine completeness and accuracy.
2.3 Review the City's current practices and policy objectives, identify major
interests and concerns, and review City billing information.
2.4 Conduct a kick-off meeting with City staff to establish goals and objectives, to
identify major interest, concerns, and City's expectations. The session will also
facilitate a review of the overall study approach, schedule, and deliverables.
Capital Improvement Program Assessment
Task 3 - Capital Facility Plan Assessment
RFC will update the CIP developed earlier including annual replacements, additions and
improvements, and expansions to the water and wastewater systems. Alternative methods of
financing the improvements, including grants, low interest loans, long-term debt, annual
operating revenues, capital facility fees revenue, funds on hand, and direct contributions, would
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be evaluated. Financing plans to meet the projected capital improvements throughout the study
period would be developed.
3.1 Investigate alternative financing methods for the capital improvement projects.
RFC will recommend financing options that would provide the maximum value
at the lowest cost to the City. The financing options may include but not be
limited to:
• local resources such as reserves and rates,
• low-interest loans—State Revolving Fund (SRF),
• long term debt such as revenue bonds, general bonds, or Certificate
of Participation(COP),
• California Infrastructure and Economic Development Bank Program,
• Department of Water Resources' Water Conservation Bond Law,
• Water Reuse Authority Loans.
Determination of Revenue Requirements
Task 4 -Revenue Requirement Projections
The objective of this task is to project the City's revenue needs for the study period. This
major task requires: an assessment of revenues based on the existing rates and fee schedules; an
estimation of future revenue requirements; the City's ability to meet projected revenue
requirements; and the determination of the level of revenue adjustments and additional
financing requirements. The following subtasks will be completed:
4.1 Estimate water, wastewater, and recycled water revenues based on current rates,
source acquisition charges and impact fee levels, incorporating the projected
number of customers and service requirements. Historical growth trends,
quantity of service provided, and patterns in customer service characteristics
will be evaluated. Recent studies of population trends and growth will be
reviewed and used in making projections of customers and associated usage.
4.2 Review and project revenues from miscellaneous sources such as interest
earnings, miscellaneous service fees, fire line revenues, or other sources.
4.3 Develop annual revenue requirements for the water and wastewater operations
of the City taking into consideration the following factors:
• Historical data and current year's budgets,
• Current Operation and Maintenance expenses,
• Impact of recycled water supplies on water consumption and revenues,
• Historical water acquisition expenses,
• Routine and major capital expenditures,
• Future system service requirements and system growth,
• Expected operational changes and inflation,
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• Debt service on existing and any proposed new financing methods including
appropriate reserves,
• Other cash obligations.
• Cost to provide service to outside City customers.
4.4 Develop future cash flow analyses for the water and wastewater operations for
an eight-year study period (or as desired by the City) showing application of
revenue under existing rate levels. On the basis of the cash flow analyses,
develop revenue level adjustments needed to meet projected revenue
requirements. Consider reprioritizing and rescheduling capital projects and
consider application of available reserves to minimize borrowing for capital
improvement projects. These results will be presented in an easy to understand
graphical format. For example, the graphic below shows how the proposed rates
would meet revenue requirements.
4.5 Evaluate and recommend operating reserve balances that need to be maintained
in the City's water and wastewater funds.
Cost of Service and Rate Design
We will update the cost of service allocations previously developed in the rate model to reflect
cost-causative concepts in accordance with generally accepted utility practices and generate
unit costs and develop rates.
Task 5—Cost of Service Analysis
RFC will allocate cost of service to current customer classifications. Specific subtasks include
the following:
5.1 Based on current rates, we will estimate the relative responsibility of each
customer class for each of the functional cost elements. Elements will be based
on billing summary data, other locally available data which may be applicable,
and RFC's experience with other utilities exhibiting similar usage characteristics
and patterns.
5.2 Allocate the cost of service to the various cost components which constitute a
functional classification of the different types of service the City provides.
Functional cost components for water will include base or volume related costs,
extra capacity costs, fire protection costs, and customer costs. Functional cost
components for wastewater will include volume, strength (BOD and TSS),
infiltration and Inflow (I&I), and customer costs. These will represent the
revenue requirements to be met from water and wastewater charges and fees
over the study period.
5.3 Distribute the costs by functional components to the various customer
classifications, identified above, on the basis of the relative responsibility of
each classification for service provided. Costs will be allocated based on the
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determination of unit of service for each customer classification and the
application of unit costs of service to the respective units.
5.4 Compare existing revenue under existing rates by each customer class with the
allocated cost of service to determine:
• the adequacy of present revenue levels for each class
• the indicated adjustment in rates required to equitably distribute costs to the
respective classes of customers
5.5 Throughout the cost allocation process, RFC will comply with City policy
considerations, procedures, and all currently known federal, state, and local
rules, regulations, and guidelines applicable to charges for water and wastewater
services.
Task 6—Review and Development of Rate Structures
The water and wastewater revenue requirements from each customer class will be recovered
through a rate structure designed to stand alone as a separate revenue source. We will design
rate structures that bring in a greater level of standardization, equitability, and ease of
implementation. The following subtasks will be performed:
6.1 We will develop alternative water rate structures as appropriate for the City
and determine the best alternative for the City. Possible structures may
include, but not necessarily be limited to, the following:
• Inverted-block rate structure by class;
• Block thresholds;
• Effects of water conservation as it relates to water alternatives;
• Pricing policies for commercial users;
• Lifeline rates;
• Non-potable water rates.
and the following for the wastewater rate structure:
• Residential flat rates;
• Uniform volume rate;
• Strength of pollutant discharged-based rate for non-residential customers.
6.2 RFC will compare the proposed water and wastewater rates developed for the
City with neighboring agencies of comparable service characteristics.
6.3 Rates for outside City customers will be based on general fund subsidy,
depreciation, and return on rate base.
Task 7—Rate Design
Based on Task 6 above, water and wastewater rates for inside-City customers will be developed
so as to take effect on the date selected by the City. The rates will be determined taking into
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consideration total annual revenue requirements, allocated cost of service, water conservation,
City policy considerations and compliance with state requirements. The specific subtasks
include:
7.1 Design schedule of water and wastewater rates to equitably recover total
revenue requirements from classes of customers. The rates will be designed in
accordance with the results of the cost of service analysis and will be developed
for inside and outside City customers.
7.2 Prepare comparisons of typical water and wastewater bi-monthly bills for each
customer class under existing and proposed rates for typical levels of
usage/contribution.
Task 8—Citizen's Review Committee Involvement
Throughout the course of the study, RFC will work with the Citizen's Review Committee
(CRC)to explain the project, identify goals and issues for the water and wastewater utilities,
determine issues of concern and develop an understanding of the need to replace and refurbish
the water and wastewater systems and how the revenue plan will be developed to minimize the
impact on the City's constituents.
8.1 During the course of the study, RFC will conduct eight meetings with members
of the CRC to discuss the status of the study, resolve issues of concern and
discuss the direction of the study. We will present proposed rates and rate
structures and obtain feedback from the citizens. We will discuss the elements
that are integrated into the revenue plan and how it impacts the rates.
Task 9—Meetings and Deliverables
Throughout the course of the studies, RFC will participate in meetings, presentations and
prepare project reports as follows:
9.1 RFC will attend up to three additional meetings to review background information
and rate study issues, review rate proposals and participate in public meetings to
review issues related to the rate studies. Additional meetings can be provided on a
time and materials basis.
9.2 Prepare five copies of the water and wastewater draft report which will include
findings and recommendations along with various graphics and tables for the
City's review.
9.3 Deliver to the City an update EXCEL based rate model used to develop the
proposed rates and rate schedules. The model will be provided on an electronic
formatted disk.
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Task 10—Final Report
RFC, with assistance of City Staff, will prepare a final report encompassing all study findings,
input, and recommendations at the conclusion of the project and present findings to City staff
and at public meetings. Specific subtasks include:
10.1 Incorporate the City's comments of the draft report into the final report and
submit twenty(20)copies to the City.
10.2 Present the final report and recommendations to the City.
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ATTACHMENT B
PROJECT SCHEDULE
All services described in Attachment A will be completed by Dec 31, 2004.
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ATTACHMENT C
PROJECTFEE
Services will be provided on a salary cost basis. Tasks in this scope of work will be completed
for a not to exceed amount of$54,000 including direct costs.
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ATTACHMENT D
RATE SCHEDULE
Hourly Rates
RFC proposes to provide the tasks identified in our Scope of Services at the hourly billing rates
shown in the table below.
Hourly Billing
Rate
Project Manager $175
Consultant $175
Financial Analysts $125
Clerical $60
Reimbursement of Direct Expenses
Direct expenses are costs incurred in providing the services outlined in the proposed Scope of
Services. Such expenses include items such as travel, technology charges,postage, long
distance telephone, reproduction, etc.
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