HomeMy WebLinkAboutContracts & Agreements_137-2001_CCv0001.pdf AGREEMENT TO FURNISH SERVICES FOR THE
PREPARATION OF THE WATER AND WASTEWATER RATE STUDY
This Agreement is made and entered into this 18th day of September,2001 by and between the City
of Redlands, a municipal corporation(hereinafter"City") and Dudek&Associates,Inc. (hereinafter
"Service Provider).
In consideration of the mutual promises, covenants and conditions hereinafter set forth, City and
Service Provider hereby agree as follows:
ARTICLE I - ENGAGEMENT OF SERVICE PROVIDER
1.1 City hereby engages Service Provider, and Service Provider hereby accepts the engagement,
to perform services ("Services") for preparation of the Water & Wastewater Rate Study
("Project"}, for the City of Redlands, California.
1.2 The Services shall be performed by Service Provider in a professional manner, and Service
Provider represents that it has the skill and the professional expertise necessary to provide
high quality Services for the Project at the level of competency presently maintained by other
practicing professional Service Providers in the industry providing similar types of services.
ARTICLE 2 - SERVICES OF SERVICE PROVIDER
2.1 The specific Services which Service Provider shall perform are more particularly described
in Attachment"A,"entitled"Scope of Services,"which is attached hereto and incorporated
herein by this reference.
ARTICLE 3 - RESPONSIBILITIES OF CITY
3.1 City shall make available to Service Provider information in its possession that is pertinent
to the performance of Service Provider's Services.
3.2 City will provide access to and make provisions for Service Provider to enter upon City-
owned property or rights-of-way as required by Service Provider to perform the Services.
3.3 City designates Gary Phelps as Project Manager, to act as its representative with respect to
the Services to be performed under this Agreement.
ARTICLE 4- PERIOD OF SERVICE
AGREEMENT FOR THE WATER& WASTEWATER RATE STUDY
September 18, 2001
Page 2
4.1 Service Provider shall perform the Services in a diligent manner and in accordance with the
schedule set forth in Attachment"B", entitled "Project Schedule".
ARTICLE 5 -PAYMENTS TO THE SERVICE PROVIDER
5.1 The total compensation for Service Provider's performance of Services shall not exceed the
amount of$101,644. City shall pay Service Provider on a time and materials basis up to the
not to exceed amount, in accordance with Attachment"C", entitled "Project Fee",based on
the hourly rates shown in Attachment"D", entitled"Rate Schedule".
5.2 Service Provider shall bill City within ten days following the close of each month by
submitting an invoice indicating the Services performed, who performed the services,
indirect costs, and the detailed cost of all Services, including backup documentation.
Payments by City to Service Provider shall be made within 30 days after receipt and
approval of Service Provider's invoice, by warrant payable to Service Provider.
5.3 All contractual 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:
C Service Provider
Gary Phelps Dudek & Associates, Inc.
Municipal Utilities Department 605 Third Street
35 Cajon Street Encinitas, CA 92024
P. O. Box 3005
Redlands CA 92373
When so addressed, such notices shall be deemed given upon deposit in the United States
Mail. In all other instances,notices,bill and payments shall be deemed given at the time of
actual delivery. Changes may be made in the names and addresses of the person to whom
notices,bills, and payments are to be given by giving notice pursuant to this paragraph.
ARTICLE 6 - INSURANCE AND INDEMNIFICATION
6.1 Service Provider shall maintain worker's compensation insurance, and in addition. Said
AGREEMENT FOR THE WATER& WASTEWATER RATE STUDY
September 18, 2001
Page 3
ARTICLE 6 - INSURANCE AND INDEMNIFICATION
6.1 Service Provider shall maintain worker's compensation insurance, and in addition. Said
worker's compensation insurance shall be on an "occurrence" basis in a minimum
combined single limit of$1,000,000, and $1,000,000 in the aggregate. Service Provider
shall maintain insurance to protect City from claims for damage due to bodily injury,
personal injury and death, and claims for injury to or destruction of tangible property
while performing the Services required by this Agreement. Said public liability and
property damage insurance shall be on an "occurrence" basis in a minimum combined
single limit of $1,000,000, and $2,000,000 in the aggregate. Service Provider shall
maintain comprehensive automobile liability insurance with a combined single limit of
$500,000 per occurrence, for bodily injury and property damage. Service Provider shall
maintain professional liability insurance in the aggregate amount of $1,000,000 with a
minimum of $500,000 on a claims-made basis. City shall be named as an additional
insured under all policies for public liability, property damage and comprehensive
automobile liability, and such insurance shall be primary with respect to City and non-
contributing to any insurance or self-insurance maintained by the City. Service Provider
shall provide City with certificates of insurance evidencing such insurance coverage prior
to commencing the Services.
6.2 Service Provider shall indemnify, hold harmless and defend City and its elected officials,
officers, agents and employees from and against all claims, loss, damage, charges or
expense, to which it or any of them may be put or subjected to the extent that they arise
out of or result from, or are caused by any negligent act or actions, omission or failure to
act on the part of the Service Provider, its contractors, its suppliers, anyone directly or
indirectly employed by any of them or anyone for whose acts or omissions any of them
maybe liable in the performance of the Services required by this Agreement.
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 Service Provider shall not assign any of the Services required by this Agreement, except
with the prior written approval of City and in strict compliance with the terms, provisions
and conditions of this Agreement.
AGREEMENT FOR THE WATER& WASTEWATER RATE STUDY
September 18, 2001
Pate 4
7.3 Service Provider's key personnel for the Project are:
Project Manager: Susanne Lockhart (Dudek & Associates, Inc.)
Principal in Charge: D. Michael Metts, (Dudek & Associates, Inc.)
Lead Rate Consultant: Karyn Keese (The Deese Company)
Service Provider agrees that the key personnel shall be made available and assigned to the
Project, and that they shall not be replaced without concurrence from City.
7.4 All documents, records, drawings, designs, costs estimates, electronic data files and
databases and other Project documents developed by the Service Provider pursuant to this
Agreement 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
for other projects and any use of incomplete documents will be at City's sole risk.
7.5 Service Provider is for all purposes an independent contractor. All personnel employed
by Service Provider are for its account only, and in no event shall Service Provider 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 by City of the Services.
7.7 This Agreement may be terminated by either party, without cause, by providing thirty(30)
days prior written notice to the other(delivered by certified mail, return receipt requested)
of intent to terminate.
7.8 Upon receipt of a termination notice, Service Provider shall (1) promptly discontinue all
services affected, and(2)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 Service Provider in performing the Services required by
this Agreement.
7.9 Service Provider shall maintain books and accounts of all Project related payroll costs and
all expenses. Such books shall be available at all reasonable times for examination by the
City at the office of the Service Provider.
7.10 This Agreement, including the attachments incorporated herein by reference, represents
the entire agreement and understanding between the parties and any prior negotiations,
proposals or oral agreements are superseded by this Agreement. Any amendment to this
Agreement shall be in writing, approved by the City Council and signed by City and Service
AGREEMENT FOR THE WATER & WASTEWATER.RATE STUDY
September 18, 2001
Page 5
Provider.
7.11 This Agreement shall be governed by and construed in accordance with the laws of the State
of California.
IN WITNESS WHEREOF, duly authorized representatives of the City and Service Provider have
signed in confirmation of this Agreement.
City of Redlands Dudek &Associates,Ince
("City") ("Service Provider")
By: By:
PAT GILBREATH FRANK J. DUDEK
Mayor Pre�ident
ATTEST:
City erk, City;' dlands
AGREEMENT TO FURNISH SERVICES FOR THE
PREPARATION OF THE WATER AND WASTEWATER RATE STUDY
ATTACHMENT A
SCOPE OF SERVICES
It is not our intention to establish a budget for the enterprises. Our objective with this task is to
ascertain the amount of revenues that should be generated through the rates given the financial
obligations of the City, with consideration for future needs and prudent financial management We
expect that staff may wish to consider the implications of various revenue requirement assumptions
and financial policies in order to arrive at a revenue requirement acceptable from several
perspectives.
While we would like to reach definitive conclusions on the revenue requirement prior to proceeding
with the cost of service and rate design tasks, it is possible to calculate rates with different revenue
requirement assumptions. One of the benefits of the draft rate models we develop is that various
what-if scenarios can be explored.
Task 3—Identify and Evaluate Customer, Water Use, and Wastewater Loading
Characteristics
We will examine the City's current water and wastewater user classifications and summarize the
current number of customers by customer class, meter size, and service provided. Water use data
will be extremely valuable for both water and sewer rate analyses. Prior to performing cost of
service analyses we will want to evaluate water use data in detail so that we are familiar with
customers' water use characteristics(e.g.,winter water use versus summer water use patterns). In
addition, we will examine wastewater-loading characteristics of each customer class as well as
treatment plant inflows.
Summary water use data will be examined to estimate demand and peaking characteristics. Water
use and meter size data will be used in subsequent tasks for the allocation of costs to functional
categories and customer classes.
It is our experience that the presentation of water use characteristic data and information can be very
enlightening to decision-makers and ad hoc committees. If appropriate for the decisions at hand,we
will employ graphical presentation of water use and other customer data to illustrate the implications
of various rate design choices. It is through the graphical presentation of information we can make
complex issues easier to understand.
Task 4—Water and Wastewater Cost Allocations
During this task we will examine the City's budget and cost data at the greatest level of detail
available to allocate costs to customer, capacity, and commodity components. There are several
approaches to cost allocation. Water rates will follow rate-setting principles promulgated by the
American Water Works Association. Wastewater rates will follow the requirements of the State
Water Resources Control Board's Revenue Program Guidelines. We will tailor the cost allocation
approach to the City's cost structures.
Using the annual revenue requirement for each enterprise, we will allocate identified costs to
appropriate cost components using an agreed upon cost allocation methodology. Fixed and variable
costs will be identified based on the level of detail available in the budget and accounting records.
Fixed costs include both customer costs and capacity costs. The later varies with the potential
demand that a customer could place on the water or wastewater system(as dictated by meter size).
Task 7—Workshops with the Citizens Committee and City Council
A significant part of this engagement could be to conduct a series of workshops with the ad hoe
Review Citizens Committee and the City Council. Our Project Team has extensive experience in
the type of rate setting workshops envisioned by the City. We have conducted numerous similar
workshops for a wide variety of clients in a variety of settings.
The City's RFP does not specifically address the fall process of the Citizens Committee. We
have worked with various types of formal and informal citizens committee structures and would
be happy to discuss the pros and cons of each to achieve the outcome envisioned by the City.
Due to time and budget constraints we might suggest a subcommittee of the Facilities and
Infrastructure Committee and/or City Council or a liaison member be included in the Citizens
Committee. This will allow for ongoing City Council education during the study process. We
have outlined in the following pages one suggested approach that the Citizen's Committee might
take. There are many variations.
We have prepared our work plan assuming that seven workshops will be performed(as described
in the following pages). We have also assumed that changes in the water and wastewater user fees
will be the focus of the Committee and that connection fees will be excluded. Costs for any
additional workshops, if they are needed or if the City would like to modify the scope, can be
included on a time and expense basis. The workshops will serve several purposes, including:
Educate and inform the citizens and City Council on rate setting practices and applicability to
the City.
Identify and prioritize rate setting objectives and policy goals
Develop an understanding of the usefulness and limitations of available data
Develop and evaluate a cost of service methodology that meets the City's needs
Build consensus for the need for rate increases
There are three phases to the workshop process.
Phase 1: The first is orientation and education and involves developing an understanding of
rate issues,the analyses that will be required, and rate policy objectives.
Phase 2: The second phase is the analytical phase. This phase includes presentation of detailed
information and analyses, and discussion of cost of service and rates.
Phase 3: The third phase involves fine-tuning and reaching consensus. While the entire
process involves consensus building,this final phase brings everything together.
Each workshop is intended to cover a certain aspect of the rate study, and should result in various
decisions that will allow us to move forward to the next step. The seven workshops we envision
include:
Workshop#1 —Orientation and Policy Direction
Workshop#2 —Water Rates: Revenue Requirements, Cost of Service, and Cost Allocations
Workshop#3 —Wastewater Rates: Revenue Requirements, Cost of Service, and Cost
Allocations
remaining differences in opinion can be resolved. Rate calculations will be presented in detail with
explanation of observations made along the way. We will also present the rate calculations relative
to rate setting objectives so the Committee can see how well each are attained.
Review Draft Report(Workshop #6—Potential Joint Workshop)—This workshop should include
a review of a draft letter report containing near-final recommendations. Last minute adjustments are
still possible at this stage, and this is where some miscellaneous issues could be addressed.
Following this workshop we would make final changes to rate calculations based on comments
received, and incorporate these into a final rate study report.
Consensus Building among Stakeholders(Workshop#7)—This workshop will be utilized to address
any continuing concerns by the Stakeholders prior to the adoption of the proposed rate structures.
Task 8—Prepare Reports and Present Study Recommendations
Following completion of the cost of service, rate design, and workshops I to 7 of the Citizens
Committee process we will prepare a draft letter report on the water and wastewater rate study and
recommendations. The report will incorporate the issues addressed during the study, and document
all detailed rate calculations. In addition, it will include five-year rate projections based on the
revenue requirements contained in the five-year financial plans.
Following the receipt of comments from staff, the Citizens Committee, the Facilities and
Infrastructure Committee,possibly the City Council, the report will be finalized. Twenty copies of
the final report will be submitted to the City, along with a reproducible original. We will then
present the recommendations from the study and the report at one public heating. This Task includes
the attendance of the City Council meeting for the adoption of the proposed rate structures.
Task 9—Rate Model Documentation and Training
It is our understanding that the City may want the consultant to deliver an integrated rate model that
can be used for future rate analyses and updates. We do not have a standard off-the-shelf rate model
that we use for all engagements. We have found a better approach is to develop customized rate
model,which meets each client's unique data structures and needs. We will develop rate models as
part of this engagement.
As an option to the City,we will provide copies of the water and wastewater rate models at the end
of the engagement. Documentation would include brief step-by-step instructions for performing
annual updates or what-if analyses, a fist identifying all data input fields,flow diagrams, identifying
each component and how they are linked together, and an annotated hard copy of the complete
model. In addition, to providing the City with electronic copies of the rate models and
documentation,we would provide training on the use of the rate models.
PROJECT SCHEDULE
Issue Notice to Proceed: September 19, 2001
Task#1: Initial Data Collection and Kick-off Meeting
Week of September 24, 2001
Task#2: Five-Year Financial Plans and Annual Revenue Requirements
October 2001
Task#3: Identify&Evaluate Customers. Water Use&Wastewater Loading Characteristics
October 2001
Task#4: Water and Wastewater Cost Allocations
October 2001
Task#5: Rate Design
November 2001
Task#6: Connection Fee Analysis/Misc. Fee analysis
November 2001 and December 2001
Task#7: Workshops:
W Week of October 29,2001
W2 Week of November 12,2001
W3 Week of November 26,2001
W4 Week of December 9,2001
W5 Week of January 7,2002
W6 Week of January 21,2002
W7 February 2002
Task#8: Prepare Reports and Present Study Recommendations
February 2002
Public Hearing for Rates
February 2002
Task#9: Rate Model Documentation and Training
February 2002
_ City Council Meeting and Public Hearing March S,2002
_ Implementation of new Rates April 2002
PROJECT FEE
r KK KK Dudek Dudek Dudek TOTAL
Associate Principal Costs
Engineer Engineer
Project Task WW Water Hours Costs Hours Hours
1,0 Data Analysis and Project Management 20 20 40 $5,750 36 1 $3,920 $9,6701
2.0 Five-Year Financial Plans and Revenue Rqmts. 24 24 48 $6,900 24 1 $2,660 $9,5601
1 TO Evaluate Customer and Water Use Data 16 16 32 $4,600 32 1 $3,500 $8,100
4.0 Water/Wastew'ater Cost Allocations 16 16 32 $4,600 24 4 $3,080 $7,6801
5.0 Wate-r/Wastewater Rate Design 16 16 32 $4,600 24 1 $2,660 $7,260
6.0 Perform Connection Fee Analyses 45 45 90 $12,938 50 1 $5,390 $18,3281
7.0 Public-Participation(7 meetings) 42 42 84 $12,075 68 4 $7,700 $19,775
8.0 Prepare Reports and Present Study Rees. 26 26 52 $7,475 36 1 $3,920 $11,3951
F9.0 to Model Documentation&Training 10 10 20 $2,875 20 1 $2,240 $5,1151
1 1
Professional Hours and Fees 215 215 430 $61,813 314 15 $35,070 $96,8831
Expenses $3,709 $1,052 $4,761
TOTAL PROJECT COSTS $65,521 $36,122 $101,6441
RATESCHEDULE
The Keese Company Hourly Rate:
Karyn se is available at an hourly rate of'$1 5 per hour plug travel expenses.
Dudek&Associates,Inc.Engineering Services:
principal End $l (Michael Metts, PE
project Manager $l {}
Associate Engin $105/hr (Susanne Lockhart)
project Engineer H $
project Engineer I $85/hr
Dudek&Associates,,Inc. Support Services:
Computer Processing $651hx
Clerical Administration $55/hr
Material and outside services. Subcontractors,rental of special equipment,special
reproductions and blueprinting,outside data processing and computer service etc. are
charged at 1.15 the direct cost.
Forensic,Engineering: Court appearances and depositions as expert witness will be billed
out at 1.5 times the:normal rate.
Emergency and Holidays:Minimum charge of two Hours will be billed at 1.5 times the
normal rate.
Mileage is at 34.5 cents per mile. Per dicm where overnight stay is involve is charged at
cost. (Though for the purposes of this project, Susanne Lockhart will be-,considered to be
working out of Dudek's Redlands office and will not charge the City of
travelcosts.)
Dudek&Associates,Inc. also has to following services available at the OWS
request,-
planning
Pl `
Surveyffig
Hydrogeological Services
Environmental Services
Constructionmanagement Services
District Management Operations
Information Systems
'c ra ' g/C l Services