HomeMy WebLinkAboutContracts & Agreements_45-2006_CCv0001.pdf AGREEMENT TO FURNISH PROFESSIONAL SERVICES FOR
THE 2006 WATER AND WASTEWATER RATES AND CHARGES STUDY
This agreement for consulting services("Agreement")is made and entered into this 7"'day of
March, 2006 ("Effective Date"), by and between the City of Redlands, a municipal corporation
("City") and Raftelis Financial Consultants, Inc. ("Consultant") who are sometimes individually
referred to herein as a"Party" and together, as the "Parties."
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 consulting services in connection
with City's preparation of its 2006 Water and Wastewater Rates and Charges Study (the
"Services").
1.2 The Services shall be performed 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 more particularly described in 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 laws and regulations in
the performance of this Agreement including, but not limited to, the Americans with
Disabilities Act and the Fair Employment and Housing Act.
ARTICLE 3 - RESPONSIBILITIES OF CITY
3.1 City shall make available to Consultant information in its possession that may assist
Consultant in performing the Services.
12 City will make provision for Consultant to enter upon City-owned property, as required by
Consultant, to perform the Services.
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33 City designates Douglas Headrick as City's representative with respect to performance of the
Services and such person shall have the authority to transmit instructions, receive
information,interpret and define City's policies and decisions with respect to performance of
the Services.
ARTICLE 4 - PERIOD OF SERVICE
4.1 Consultant shall perform the Services in a prompt and diligent manner, and in accordance
with the schedule set forth in Exhibit"B," entitled"Project Schedule."
ARTICLE 5 - PAYMENT AND NOTICE
5.1 The total compensation for Consultant's performance of the Services shall not exceed the
amount of Sixty-Eight Thousand Eighty Dollars($68,080.00). City shall pay Consultant on a
time and materials basis up to the not to exceed amount in accordance with Exhibit "C"
entitled"Project Fee," and based upon the hourly rates shown in Exhibit"D,"entitled Rate
Schedule.
5.2 Payments by City to Consultant shall be made within thirty (30) days after receipt and
approval by City of Consultants's invoice, by warrant payable to Consultant. Invoices
shall be sent on a monthly basis.
5.3 All notices shall be given in writing by personal delivery or by mail. Notices, sent by
mail should be addressed as follows:
City: Douglas Headrick
Municipal Utilities Department
PO Box 3005
Redlands, CA 92373
Consultant: Sudhir Pardiwala
Raftelis Financial Consultants
201 S. Lake, Ste. 803
Pasadena, CA 91101
When so addressed, such notices shall be deemed given upon deposit in the United States Mail.
Changes may be made in the names and addresses of the person to who notices and payments are
to be given by giving notice pursuant to this section.
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ARTICLE 6 - INSURANCE AND INDEMNIFICATION
6.1 All insurance required by this Agreement shall be maintained by Consultant for the duration
of its performance of the Services. Consultant shall not perforin 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 the Services. All insurance policies shall include a
provision prohibiting cancellation of the policy except upon thirty (30) days prior written
notice to City.
6.2 A. Consultant shall secure and maintain Workers' Compensation and Employer's
Liability insurance throughout the duration of this Agreement in an amount which meets the
statutory requirement with an insurance carrier acceptable to City. The insurance policy shall
include a provision prohibiting cancellation of said policy except upon thirty(30)days prior
written notice to City.
B. Consultant expressly waives all rights to subrogation against City, its elected
officials, officers and employees 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 waiver 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 are valid and enforceable only to the extent of the negligence of Consultant, its
officers, agents and employees.
6.3 Hold Han-nless and Indemnification. Consultant shall indemnify,hold harmless and defend
City and its elected officials, employees and agents from and against any and all claims,
losses or liability,including attorneys' fees,arising from injury or death to persons or damage
to property occasioned by any act, omission or failure to act by Consultant, its officers,
employees and agents in performing the Services.
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6.4 Assignment. Consultant is expressly prohibited from assigning any of the Services without
the express written consent of City. In the event of mutual agreement between 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 the performance of any services by
the assignee. Assignment does not include printing or other customary reimbursable
expenses that may be provided in this Agreement.
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6.5 Comprehensive General Liability Insurance. Consultant shall secure and maintain in force
throughout the duration of the 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. City shall be named as an additional insured the
insurance policy shall include a provision prohibiting cancellation of said policy except upon
thirty (30) days prior written notice to City. Such insurance shall be primary and non-
contributing to any insurance or self-insurance maintained by City. Certificates of insurance
and endorsements shall be delivered to City prior to commencement of the Services.
6.6 Professional Liability 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 claim made. Certificate of liability insurance and endorsement shall be
delivered to City prior to commencement of the Services.
6.7 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 on the project,hired and non-owned vehicles,and employee
non-ownership vehicles. Such insurance shall be primary and non-contributing to any
insurance or self insurance maintained by City. City shall be named as an additional insured
and a certificate of liability insurance and endorsement shall be delivered to City prior to
commencement of the Services.
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, including fees for in-house counsel of the
Parties at rates prevailing in San Bernardino County, California.
7.2 Consultant shall not assign any of the Services to be performed under this Agreement,except
with the prior written approval of City and in strict compliance with the terms, provisions
and conditions of this Agreement.
7.3 Consultant's key person to perform the Services is Sudhir Pardiwala, Vice-President.
Consultant agrees that this key person shall be made available and assigned to perform the
Services and that she shall not be replaced without concurrence from City.
7.4 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 such documents, shall become the property of City and shall be delivered to City
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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 sole risk.
7.5 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 on behalf of City.
7.6 Unless earlier terminated, as provided for below, this Agreement shall terminate upon
completion and acceptance of the Services by City.
7.7 This Agreement may be terminated by City, in its sole discretion and without cause, by
providing five (5) business days' prior written notice to Consultant (delivered by certified
mail, return receipt requested) of intent to terminate.
7.8 If this Agreement is terminated by City,an adjustment to Consultant's compensation shall be
made,but(1)no amount shall be allowed for anticipated profit or unperformed services,and
(2) 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.
7.9 Upon receipt of a termination notice, Consultant shall immediately discontinue all services
affected, and within five (5) days of the date of the termination notice, 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 materials as may have been accumulated by Consultant in
performing the Services required by this Agreement. Consultant shall be compensated on a
pro-rata basis for work completed up until notice of termination.
7.10 Consultant shall maintain books and accounts of all payroll costs and expenses related to the
Services. Such books shall be available at all reasonable times for examination by City at the
office of Consultant.
7.11 This Agreement, including the Exhibits incorporated herein by reference, represents the
entire agreement and understanding between the Parties as to the matters contained herein,
and any prior negotiations, written proposals or verbal agreements relating to such matters
are superseded by this Agreement. Any amendment to this Agreement shall be in writing,
approved by City and signed by City and Consultant.
7.12 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 the City and Consultant have
signed in confirmation of this Agreement.
CITY OF REDLANDS RAFTELIS FINANCIAL CONSULTANTS,
INC.
By: By:
Jon Harrison, Mayor Sudhir Pardiwala, Vice President
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Attest:
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City Clerk
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EXHIBIT ##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 I —Project Managemen
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.
Comparison of Revenues Under Existing and
Proposed Rates with Revenue Requirements
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5.04 VI
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0 4.0 _
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0 3.0 —
2.0 - — — — —
1.0
0.0
2000 2001 2002 2003 2004 2005
Fiscal Year
M O&M Expense f' Revenue Under Existing Rates
Example 03 Deist and Capital Expense '-*- Rev Under Proposed Rates
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:
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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
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 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 retain the current water and wastewater rate structures. As an option, if
the City is interested, we can review alternative rate structures as appropriate for
the City and determine the best alternative for the City. Possible structures may
include 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;
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• 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 the current methodology.
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
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.
7.3 Connection fees will be reworked to include capital projects carried out in the
last year and updated to reflect the construction cost index for Los Angeles.
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 six 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
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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.
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 five copies to the City.
10.2 Present the final report and recommendations to the City.
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EXHIBIT '•13•'
PROJECT SCHEDULE
All services described in Attachment A will be completed by November 30, 2006.
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EXHIBIT '•c"
PROJECT FEE
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$68,080 including direct costs.
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EXHIBIT "'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 $195
Consultant $150
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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