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HomeMy WebLinkAboutContracts & Agreements_41-2019PS11(12419) AGREEMENT TO PERFORM PROFESSIONAL SERVICES This agreement for the provision of professional financial services to complete a water, wastewater and recycled/non-potable water rate study ("Agreement") is made and entered in this 5th day of March, 2019 ("Effective Date"), by and between the City of Redlands, a municipal corporation ("City") and Raftelis Financial Consultants, Inc ("Consultant") City and Consultant 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 11 ARTICLE 1 — ENGAGEMENT OF CONSULTANT City hereby engages Consultant to provide professional financial services to complete a water, wastewater and recycled/non-potable water rate study services for City (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 I The Services that Consultant shall perform are more particularly described in Exhibit "A," entitled "Scope of Services," which is attached hereto and incorporated herein by reference 2 2 Consultant shall comply with applicable federal, state and local laws and regulations in the performance of this Agreement including, but not limited to, State prevailing wage laws 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 3 2 City designates Paul Toor, Municipal Utilities and Engineering Director, 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 — PERFORMANCE OF SERVICES 4 I Consultant shall perform and complete the Services in a prompt and diligent manner 4 2 The term of this Agieement shall commence on its Effective Date and shall terminate on March 4, 2020, unless terminated eailier as provided herein L Icaldjm\Agreeinents\Raftelis Financial Consultants.PS 1 1 MUED REV doc Ps 1 1 (1 24 19) 4 3 If Consultant's Services include deliverable electronic visual presentation materials, such materials shall be delivered in a form, and made available to the City, consistent with City Council adopted policy for the same It shall be the obligation of Consultant to obtain a copy of such policy from City staff ARTICLE 5 — PAYMENTS TO CONSULTANT 5 1 Total compensation for Consultant's performance of the Services shall not exceed the amount of ninety five thousand four hundred eighty eight dollars ($95,488) City shall pay Consultant on a time and materials basis up to the not to exceed amount in accordance with Exhibit "B" entitled "Cost Proposal" attached hereto and incorporated herein by reference 5 2 Consultant shall submit monthly invoices to City describing the Services performed during the preceding month Consultant's invoices shall include a brief description of the Services performed, the dates the Services were performed, the number of hours spent and by whom, and a description of reimbursable expenses related to the Services City shall pay Consultant no later than thirty (30) days after receipt and approval by City of Consultant's invoice 5 3 Any notice or other communication required, or which may be given, pursuant to this Agreement, shall be in writing Any such notice shall be deemed delivered (i) on the date of delivery in person, (n) five (5) days after deposit in first class registered mail, with return receipt requested, (iii) on the actual delivery date if deposited with an overnight courier, or (iv) on the date sent by facsimile, if confirmed with a copy sent contemporaneously by first class, certified, registered or express mail, in each case propel ly posted and fully prepaid to the appropriate address set forth below, of such other address as a Party may provide notice in accordance with this section City City Cleik City of Redlands 35 Cajon Street P 0 Box 3005 (mailing) Redlands, CA 92373 Consultant Sudhu Pardiwala, Executive Vice President Raftelis Financial Consultant, Inc 24640 Jefferson Avenue, Suite 207 Murrieta, CA 92562 spardlwala@raftelis com (626) 827-8931 ARTICLE 6 — INSURANCE AND INDEMNIFICATION 6 1 The following insurance coverage required by this Agreement shall be maintained by Consultant for the duration of its performance of the Services Consultant shall not perform any Services unless and until the 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 Insurance policies L \caldamlAgreemcnts\Railelis Financial Consultants PS 1 1 MUED RE; doe PS 1 1 (1 24 19) shall include a provision prohibiting cancellation or modification of the pohcy except upon thirty (30) days prior written notice to City A Workers' Compensation and Employer's Liability insurance in the amount that meets statutory requirements with an insurance carrier acceptable to City, or certification to City that Consultant is self -insured or exempt from the workers' compensation laws of the State of California Consultant shall execute and provide City with Exhibit "C" entitled "Workers' Compensation Insurance Certification," which is attached hereto and incorporated herein by this reference prior to performance of the Services B Comprehensive General Liability insurance with carriers acceptable to City in the minimum amount 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 and such insurance shall be primary and non-contributing to any insurance or self-insurance maintained by City C Business Auto Liability coverage, with minimum limits of One Million Dollars ($1,000,000) per occurrence, combined single limit bodily injury liability and property damage liability This coverage shall include all Consultant owned vehicles used in connection with Consultant's provision of the Services, hired and non -owned vehicles, and employee non -ownership vehicles City shall be named as an additional insured and such insurance shall be primary and non-contributing to any insurance or self-insurance maintained by City D Consultant is expressly prohibited from assigning of subcontracting any of the Services without the prior written consent of City In the event of mutual agreement by the Parties to assign or subcontract a portion of the Services, Consultant shall add such assignee or subcontractor as an additional insured to the insurance policies required hereby and provide City with the insurance endorsements prior to any Services being performed by the assignee or subcontractor 6 2 Consultant shall defend, indemnify and hold harmless City and its elected officials, employees and agents from and against any and all claims, losses or liabihty, including attorneys' fees, arising from injury or death to persons or damage to property occasioned by any negligent act or omission by, of the willful misconduct of, Consultant, or its officers, employees and agents in performing the Services ARTICLE 7 — CONFLICTS OF INTEREST 7 1 Consultant covenants and represents that it does not have any investment or interest in any real property that may be the subject of this Agreement or any other source of income, interest in real property or investment that would be affected in any manner or degree by the performance of Consultant's Services Consultant further covenants and represents that in the performance of its duties hereundei, no person having any such interest shall perform any Services under this Agreement L Icaldjm\Agrecments\Rafte€is nnancial Consultants.PS 1 1.MUED.RE / doc PS 1 1 (1 24 19) 7 2 Consultant agrees it is not a designated employee within the meaning of the Political Reform Act because Consultant A Does not make a governmental decision whether to (i) approve a rate, rule or regulation, or adopt or enforce a City law, (ii) issue, deny, suspend or revoke any City permit, license, application, certification, approval, order or similar authorization or entitlement, (111) authorize City to enter into, modify or renew a contract, (iv) grant City approval to a contract that requires City approval and to which City is a party, or to the specifications for such a contract, (v) grant City approval to a plan, design, report, study or similar item, (vi) adopt, or grant City approval of, policies, standards or guidelines for City or for any subdivision thereof B Does not serve in a staff capacity with City and in that capacity, participate in making a governmental decision or otherwise perform the same or substantially the same duties for City that would otherwise be performed by an individual holding a position specified in City's Conflict of Interest Code under Government Code section 87302 7 3 In the event City determines that Consultant must disclose its financial interests, Consultant shall complete and file a Fan Political Practices Commission Form 700, Statement of Economic Interests, with the City Clerk s office pursuant to the written instructions provided by the City Clerk ARTICLE 8 — GENERAL CONSIDERATIONS 8 I 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 the use of in-house counsel by a Party 8 2 Consultant shall not assign any of the Services, except with the prior written approval of City and in strict compliance with the terms and conditions of this Agreement Any assignment or attempted assignment without such prior written consent may, in the sole discretion of City, results in City's immediate termination of this Agreement 8 3 Consultant is for all purposes under this Agreement an independent contractor and shall perform the Services as an independent contractor Neither City noi its agents shall have control over the conduct of Consultant of Consultant's employees, except as herein set forth Consultant shall supply all necessary tools and instrumentalities required to perform the Services Assigned personnel employed by Consultant are for its account only, and in no event shall Consultant or 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 Consultant L 1ca\dim\Agrcemcnts\Rafielts financial Censultants.PS 1 1 MUED REV doe PS 1 1 (1 24 19) shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an agent, nor shall Consultant have any authority, express or implied, to bind City to any obligation 8 4 This Agreement may be terminated by City, in its sole discretion, by providing not less than five (5) days prior written notice to Consultant of City's intent to terminate 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 Upon receipt of a termination notice, Consultant shall immediately discontinue its provision of the Services 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 project related 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 Consultant shall be compensated on a pro-rata basis for Services completed up to the date of termination 8 5 Consultant shall maintain books, ledgers, invoices, accounts and other records and documents evidencing costs and expenses related to the Services for a period of three (3) years, or for any longer period required by law, from the date of final payment to Consultant pursuant to this Agreement Such books shall be available at reasonable times for examination by City at the office of Consultant 8 6 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 Except as otherwise provided for herein, any amendment to this Agreement shall be in writing, approved by City and signed by City and Consultant 8 7 This Agreement shall be governed by and construed in accordance with the laws of the State of California 8 8 If one oi more of the sentences, clauses, paragraphs or sections contained in this Agreement is declared invalid, void oi unenforceable by a court of competent jurisdiction, the same shall be deemed severable from the remainder of this Agreement and shall not affect, impair of invalidate the remaining sentences, clauses, paragraphs or sections contained herein, unless to do so would deprive a Party of a material benefit of its bargain under this Agreement L IcaldjmlAgreements\Raftelis Financial Consultants.PS 1 1 MIJED RA doc PS 1 1 (1 24 19) IN WITNESS WHEREOF, duly authorized representatives of City and Consultant have signed in confirmation of this Agreement CITY OF REDLANDS Paul W Foster, Mayor Attest e Donaldson, City Clerk L 1ca\djm\Agreements\Raftclis Financial Consultants.PS 1 1 i'vlUED REV doc RAFTELIS FINANCIAL CONSULTANTS, INC By Sudhir Pardiwala, P E Executive Vice President PS 1 1 (1 24 19) EXHIBIT "A" SCOPE OF SERVICES Task 1 - Protection Initiation, Management, and Data Collection At the beginning of the study, Consultant will prepare a detailed data request list identifying the information needed to complete the various analyses for all phases of the study Information that is typically required to perform a water, wastewater, and recycled/non-potable water rate study includes, for example, recent Comprehensive Annual Financial Reports (CAFR), recent and current budgets, current and historical water production and billing data, and long-term capital improvement plans Prior to the meeting, Consultant will review any data provided Consultant believes a productive kick-off meeting is the most effective way to begin a study This meeting provides a forum to discuss goals and objectives, policy, and methodologies, any remaining data gaps, as well as finalize the work schedule Consultant will also discuss the City's financial policies and associated reserve levels as well as the capital plan for each utility The kick-off meeting will be part of a larger day with the City during which Consultant will make a field trip to the City facilities Following the meeting, Consultant will prepare detailed meeting minutes Consultant's project management approach stresses transparency, communication, objectivity, and accountability to meeting project objectives Management responsibilities extend to general administrative duties such as client correspondence, billing, documentation, and adhering to the schedule Throughout the study, Consultant will schedule interim status meetings or webinars to discuss project progress and present initial results In every project, Consultant implement a systematic program of quality assurance to ensure consistency, accuracy, and validity Consultant proposed Technical Reviewer, Steve Gagnon, will ensure that the cost of service and rate models are functioning properly and based on sound rate -making principles and standard industry practice Meeting One in person kick-off meeting with staff and UAC, one visit to the City facilities concurrent with the kick-off meeting Deliverables: Data request, Kick-off meeting agenda. presentation materials, and minutes Task 2 - Financial Plan Update In developing the financial plan, Consultant first will project revenues based on each utility's existing rates This will allow the City to examine the utilities' financial health under current rates foi a 10-year study period, including its ability to fund the maintenance or replacement of each utility's infrastructure For the water and recycled/non-potable water supplies, Consultant will work with staff to project water demand The analysis will include an examination of the availability of the recycled/non-potable water supplies and their effect on potable water consumption and revenues as well as consideration for the impact of conservation on revenues Consultant will work with City staff and the engineering consultant to discuss each utility's master plan and develop a schedule for capital improvements (oi CIP), which will be incorporated into the financial plan The model will have the capability to examine different CIP scenarios, allowing L Icaldjm\Agreements1Raftelis Financial Consultants.PS 1 1 MUED REV doc PS 1 1 (1 24 19) staff to consider different planning periods and adjust planned projects Consultant will review and discuss reserves for operating, capital, rate stabilization, and emergency purposes Consultant will then propose any necessary revenue adjustments These adjustments will translate into rate adjustments for the water and recycled/non-potable water rates that will meet the City's objectives For the wastewater utility, the new revenue requirement will aid in the cost of service analysis and the development of rates Our models include a dashboard (shown on the following page) with the following features • Flexibility to change assumptions such as water sales, CIP levels, and revenue adjustments • Error flagging of results such as failure to meet debt coverage, unmet reserve targets, etc • Sensitivity analyses that can be viewed instantaneously with built in -screen graphics Meetings One webinar with City staff, one meeting with City staff and the Utilities Advisory Committee (UAC) Deliverables Draft Water, Recycled/Non-potable Water, and Wastewater Financial PIan Models in Microsoft Excel Task 3 - Wastewater Cost of Service Analysis The cost of service analysis is based on industry standards and methodologies approved by the Water Environment Federation (WEF) Manual of Practice No 27 Financing and Charges for Wastewater Systems, 2004 At this stage, Consultant will also identify any new customer classes Wastewater expenses are allocated based on collection, treatment, customer costs, and indirect costs The goal is to distribute the cost components to classes based on responsibility This results in the total cost to serve each and the basis to develop rates Consultant will incorporate the City's policy considerations, as well as current regulations such as Proposition 218 Meetings One webinar with City staff Deliverable(s) Wastewater Cost of Service Analysis in Microsoft Excel Task 4 - Rate Design Consultant will develop a wastewatei rate model with the flexibility to compare the current rate structure with the proposed rate structures The model will have the capability to examine different rate structure scenarios to enhance revenue stability in light of competing objectives, such as affordability for essential needs and funding fixed costs The rates will be developed in compliance with Proposition 218, resulting from the compliant cost of service developed in Task 3 Since Consultant will not be updating the water and recycled/non-potable water cost of service, the revenue adjustments defined in the financial plan analysis will be applied to a five-year schedule based on the current rate structure At this trine, Consultant will also update the fire service charges using the same adjustments proposed for domestic water Once the rates have been defined, Consultant will advise the City on adjusting the ordinances Meetings One webinai with City staff, one meeting with City staff and UAC Delhvei ables• Rate and Customer Bill Impacts in Microsoft Excel for each utility L 1caldimlAgreements\Rafteiis rmancial Consultants.PS 1 1 MUI D.REv doe PS 1 1 (1 24 19) Task 5 - Miscellaneous Fees Consultant will review the City's current industrial waste and other miscellaneous fees and recommend any appropriate changes The examination will include a review of the methodology and calculations used in determining the current fees Consultant will discuss with staff the necessary employee involvement and supplies or equipment used in providing current services to determine if the fees are adequately recovering the cost of each service provided Next, Consultant will develop an adjustable fee calculator or model that incorporates these factors The model can be used in the future to update the miscellaneous fees Meetings One webinar with City staff, one meeting with City staff and UAC included in Task 4 Deliverables: One Miscellaneous Fees Calculator in Microsoft Excel Task 6 - Rate Survey Consultant will compare the City's current and proposed rates with five local water and wastewater agencies and will include recycled water rates where available While a useful benchmark, it is worth noting that such comparisons only paint a partial picture since many factors, such as topography and water sources, affect the total cost of providing water and wastewater services Consultant regularly conducts such surveys for our clients Consultant also co -publish with AWWA the nationally recognized biennial Water and Wastewater Rate Survey, and the California -Nevada Water and Wastewater Rate Survey Consultant will develop an Excel module to compare the total monthly water and wastewater bill amount of a typical residential customer within each agency The model will include the appropriate graphs and figures that display the total bill of a typical customer in each agency Meetings: None Deliverables Water, Recycled/Non-potable Water, and Wastewater Rate Survey Module in Microsoft Excel Task 7 - Draft and Final Report The draft report will include an executive summary highlighting the major issues and decisions reached during development of rates for all three utilities The main body of the report will include a brief physical description of each utility system, service area description, an overview of operation and maintenance expenses, the capital improvement plan, debt service, and the proposed revenue adjustments and rates The wastewater cost of service and rate calculations will be described in detail so that the nexus between costs and rates is clearly defined City staff members and the City's Attorney will provide comments on the report Aftei incorporating any final edits and receiving confirmation from City staff, Consultant will provide the final report It will serve as the administrative record of the rate study in fulfilment of Proposition 218 requirements Meetings One webinar to discuss draft report comments, one meeting with City staff and UAC L 1cald)mlAgreementslRaftelis financial Consultanis.PS I 1 MVIUED 1 doe PS 1 1 (1 24 19) Deliverables Draft and Final Reports in Microsoft Word and PDF file formats, Signed Final Report, Electronic files for all reports, calculations, graphs, spreadsheets, and other items prepared during the study provided on a CD/DVD Task 8 - Public Outreach Once City Council approves mailing out the Proposition 218 public hearing notice, Consultant will assist the City with conducting two public meetings prior to the hearing In one meeting, Consultant will present the updated proposed rates In this meeting, Consultant will also provide an overview of the ratemaking process, background on the utilities, and the need for the rate adjustments and updated wastewater rate structure In the second meeting, Consultant will review and respond to comments submitted and address any additional questions or comments from the public In addition, Consultant's Public Relations team will develop communication materials (press releases, FAQs, fact sheets, etc) to aid in garnering public understanding and support of the proposed rates and recommendations Meetings Four meetings with the UAC included in the tasks above, two public meetings/open houses conducted by City staff with support from Consultant Deliverables Presentation materials for two public meetings, Supplementary communications materials Task 9 - Proposition 218 Notice and Public Hearing Consultant will prepare a draft Public Hearing notice for City staff and City Attorney review and incorporate comments into the final notice City staff will print and mail the notices independently Consultant will then present the study results at a Proposition 218 hearing in which Consultant will address the City Council and public questions and comments Presentation materials will be provided to City staff beforehand for review Meetings One Proposition 218 Public Hearing Deliverables: Draft and final Proposition 218 public notices, Public hearing presentation materials L IcaldjmlAgreements\Ra(ielis financial Consultants.PS 1 1 MUL-D il£V.doc PS 1 1(1 24 19) EXHIBIT "B" COST PROPOSAL I Hours Wob Number of ( Total Fees t: Tasks Meetings Meetings I PM APM TR PR 50 edmin Total labor Expenses Expenses 1 Protect Initiation Managemcnl and 0ata Collection 0 15 18 0 12 5 50 511,815 5522 512,337 2 rieancl4l Plan Development 1 12 40 4 0 52 0 108 524,060 5522 124,602 3 Wastewater Cost of Service 0 6 2 0 16 0 30 56,660 5300 36,IM0 4 hate 0esign 1 12 14 2 0 20 0 48 511.443 5522 511,962 5 Miscellaneous rocs 1 0 2 t0 0 24 0 36 $7,490 50 57,490 6 Rale Survey 0 0 2 4 0 8 0 14 53.080 S0 S3,090 7 Draft and final Rcpon 1 4 16 0 56 0 80 516,4E0 592 516,552 8 Public 0utreach {DAC Meetings dislrihutcd above) 0 2 2 4 0 6 4 0 18 54.270 5104 54,454 9 Proposition 216 Note and Public Hearing 0 1 12 12. 0 4 0 28 57,520 5522 58.042 Total [slim:dad 6lecongs lllours 5 7 65 126 12 8 196 5 412 Hourly Billing Rate 3325 1240 5240 1240 5185 SE0 'total Professional Fees 521 125 S30,240 12,880 51,920 S36,260 5400 592,825 PW Prated Alanagrn Sadhn P.udm0a14 APM Assistant PM, An4rsa 800hung 16 18clinicuf Ravwwer Steva Gugnort PR P05f, Rela0uns A1s0oo4 [Wuf Se Seats ConscR,rn+s Admiil Adminislraliru Staff Expenses inlcude Mileage Rate of $0.58 per mile L \ca\djm\Aareemenls\Raftells Financial Consultants.PS 1 1 MUED RL,V doc Total Foes Total Expenses Total Fees 5 Expenses 592,825 52.663 195,488 PS 1 l (1 24 19) EXHIBIT "C" WORKERS' COMPENSATION INSURANCE CERTIFICATION Every employer, except the State, shall secure the payment of compensation in one or more of the following ways (a) (b) CHECK ONE By being insured against liability to pay compensation by one or more insurers duly authorized to write compensation insurance in this State By securing from the Director of Industrial Relations, a certificate of consent to self -insure, either as an individual employer, or as one employer in a group of employers, which may be given upon furnishing proof satisfactory to the Director of Industrial Relations of ability to self -insure and to pay any compensation that may become due to his or her employees I am aware of the provisions of Section 3700 of the 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 1 will comply with such provisions before commencing the performance of the work and activities required or permitted under this Agreement (Labor Code § 1861) 1 affirm that at all times, in performing the work and activities required or permitted under this Agreement, I shall not employ any person in any manner such that I become subject to the workers' compensation laws of California However, at any time, if I employ any person such that I become subject to the workers' compensation laws of California, immediately I shall provide the City with a certificate of consent to self -insure, or a certification of workers' compensation insurance I certify under penalty of penury under the laws of the State of California that the information and representations made in this certificate are true and correct RAFTELIS FINANCIAL CONSULTANTS, INC Date By Sudhir Pardiwala, P E Executive Vice President L lcaldjm'Agreementslitaftelis Financial Consultants.PS 1 1 MUED RLJdoc PS 1 1 (I 24 19) EXHIBIT "C" WORKERS' COMPENSATION INSURANCE CERTIFICATION Every employer, except the State, shall secure the payment of compensation in one or more of the following ways (a) By being insured against liability to pay compensation by one or more insurers duly authorized to write compensation insurance in this State (b) By securing from the Director of Industrial Relations, a certificate of consent to self -Insure, either as an individual employer, or as one employer in a group of employers, which may be given upon furnishing proof satisfactory to the Director of Industrial Relations of ability to self -insure and to pay any compensation that may become due to his or her employees CHECK ONE X I am aware of the provisions of Section 3700 of the 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 I will comply with such provisions before commencing the performance of the work and activities required or permitted under this Agreement (Labor Code § 1861) I affirm that at all times, in performing the work and activities required or permitted under this Agreement, I shall not employ any person in any manner such that I become subject to the workers' compensation laws of California However, at any time, if I employ any person such that I become subject to the workers' compensation laws of California, immediately I shall provide the City with a certificate of consent to self -insure, or a certification of workers' compensation insurance I certify under penalty of perjury under the laws of the State of California that the information and representations made in this certificate are true and correct RAFTELIS FINANCIAL CONSULTANTS, INC Date 3/11/2019 By- Sudhir Pardiwala, P E Executive Vice President L \ca\djm\Agreements\Raftelis Financial Consultants PS 1 1 MUED REV doc