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Raftelis Financial Consultants, Inc. - 2017-06-08
PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND RAFTELIS FINANCIAL CONSULTANTS, INC. FOR SANITARY SEWER FEE STUDY THIS AGREEMENT ("Agreement") is made and entered into by and between the City of Huntington Beach, a municipal corporation of the State of California, hereinafter referred to as "CITY," and RAFTELIS FINANCIAL CONSULTANTS, INC., a North Carolina corporation, hereinafter referred to as "CONSULTANT." WHEREAS, CITY desires to engage the services of a consultant to perform a sanitary sewer fee study ; and Pursuant to documentation on file in the office of the City Clerk, the provisions of the Huntington Beach Municipal Code, Chapter 3.03, relating to procurement of professional service contracts have been complied with; and CONSULTANT has been selected to perform these services, NOW, THEREFORE, it is agreed by CITY and CONSULTANT as follows: 1. SCOPE OF SERVICES CONSULTANT shall provide all services as described in Exhibit "A," which is attached hereto and incorporated into this Agreement by this reference. These services shall sometimes hereinafter be referred to as the "PROJECT." CONSULTANT hereby designates Sanjay Gaur, who shall represent it and be its sole contact and agent in all consultations with CITY during the performance of this Agreement. 2. CITY STAFF ASSISTANCE CITY shall assign a staff coordinator to work directly with CONSULTANT in the performance of this Agreement. agree/surfnet/professional Svcs to$49 10115 1 of 11 3. TERM; TIME OF PERFORMANCE Time is of the essence of this Agreement. The services of CONSULTANT are to commence on (e&A)L � , 20 7- (the "Commencement Date"). This Agreement shall automatically terminate three (3) years from the Commencement Date, unless extended or sooner terminated as provided herein. All tasks specified in Exhibit "A" shall be completed no later than three (3) years from the Commencement Date. The time for performance of the tasks identified in Exhibit "A" are generally to be shown in Exhibit "A." This schedule may be amended to benefit the PROJECT if mutually agreed to in writing by CITY and CONSULTANT. In the event the Commencement Date precedes the Effective Date, CONSULTANT shall be bound by all terms and conditions as provided herein. 4. COMPENSATION In consideration of the performance of the services described herein, CITY agrees to pay CONSULTANT on a time and materials basis at the rates specified in Exhibit "B," which is attached hereto and incorporated by reference into this Agreement, a fee, including all costs and expenses, not to exceed Forty-four Thousand Ninety-nine Dollars ($44,099.00). 5. EXTRA WORK In the event CITY requires additional services not included in Exhibit "A" or changes in the scope of services described in Exhibit "A," CONSULTANT will undertake such work only after receiving written authorization from CITY. Additional compensation for such extra work shall be allowed only if the prior written approval of CITY is obtained. 6. METHOD OF PAYMENT CONSULTANT shall be paid pursuant to the terms of Exhibit "B." agree/surfnet/professional svcs to$49 10115 2 of 11 7. DISPOSITION OF PLANS, ESTIMATES AND OTHER DOCUMENTS CONSULTANT agrees that title to all materials prepared hereunder, including, without limitation, all original drawings, designs, reports, both field and office notices, calculations, computer code, language, data or programs, maps, memoranda, letters and other documents, shall belong to CITY, and CONSULTANT shall turn these materials over to CITY upon expiration or termination of this Agreement or upon PROJECT completion, whichever shall occur first. These materials may be used by CITY as it sees fit. 8. HOLD HARMLESS CONSULTANT hereby agrees to protect, defend, indemnify and hold harmless CITY, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) arising out of or in connection with CONSULTANT's (or CONSULTANT's subcontractors,if any)negligent(or alleged negligent)performance of this Agreement or its failure to comply with any of its obligations contained in this Agreement by CONSULTANT, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of CITY. CONSULTANT will conduct all defense at its sole cost and expense and CITY shall approve selection of CONSULTANT's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by CONSULTANT. 9. PROFESSIONAL LIABILITY INSURANCE CONSULTANT shall obtain and furnish to CITY a professional liability insurance policy covering the work performed by it hereunder. This policy shall provide coverage for agree/surfnet/professional Svcs to$49 10115 3 of 11 CONSULTANT's professional liability in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and in the aggregate. The above-mentioned insurance shall not contain a self-insured retention without the express written consent of CITY;however an insurance policy "deductible" of Ten Thousand Dollars ($10,000.00) or less is permitted. A claims-made policy shall be acceptable if the policy further provides that: A. The policy retroactive date coincides with or precedes the initiation of the scope of work (including subsequent policies purchased as renewals or replacements). B. CONSULTANT shall notify CITY of circumstances or incidents that might give rise to future claims. CONSULTANT will make every effort to maintain similar insurance during the required extended period of coverage following PROJECT completion. If insurance is terminated for any reason, CONSULTANT agrees to purchase an extended reporting provision of at least two (2) years to report claims arising from work performed in connection with this Agreement. If CONSULTANT fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the CITY with required proof that insurance has been procured and is in force and paid for, the CITY shall have the right, at the CITY's election, to forthwith terminate this Agreement. Such termination shall not affect Consultant's right to be paid for its time and materials expended prior to notification of termination. CONSULTANT waives the right to receive compensation and agrees to indemnify the CITY for any work performed prior to approval of insurance by the CITY. agree/surfnet/professional svcs to$49 10115 4 of 11 10. CERTIFICATE OF INSURANCE Prior to commencing performance of the work hereunder, CONSULTANT shall furnish to CITY a certificate of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverage as required by this Agreement; the certificate shall: A. provide the name and policy number of each carrier and policy; B. state that the policy is currently in force; and C. shall promise that such policy shall not be suspended, voided or canceled by either party,reduced in coverage or in limits except after thirty(30)days' prior written notice;however,ten(10)days' prior written notice in the event of cancellation for nonpayment of premium. CONSULTANT shall maintain the foregoing insurance coverage in force until the work under this Agreement is fully completed and accepted by CITY. The requirement for carrying the foregoing insurance coverage shall not derogate from CONSULTANT's defense, hold harmless and indemnification obligations as set forth in this Agreement. CITY or its representative shall at all times have the right to demand the original or a copy of the policy of insurance. CONSULTANT shall pay, in a prompt and timely manner, the premiums on the insurance hereinabove required. 11. INDEPENDENT CONTRACTOR CONSULTANT is, and shall be, acting at all times in the performance of this Agreement as an independent contractor herein and not as an employee of CITY. CONSULTANT shall secure at its own cost and expense, and be responsible for any and all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other agree/surfnet/professional svcs to$49 10115 5 of 11 payroll deductions for CONSULTANT and its officers, agents and employees and all business licenses, if any, in connection with the PROJECT and/or the services to be performed hereunder. 12. TERMINATION OF AGREEMENT All work required hereunder shall be performed in a good and workmanlike manner. CITY may terminate CONSULTANT's services hereunder at any time with or without cause, and whether or not the PROJECT is fully complete. Any termination of this Agreement by CITY shall be made in writing,notice of which shall be delivered to CONSULTANT as provided herein. In the event of termination, all finished and unfinished documents, exhibits, report, and evidence shall, at the option of CITY, become its property and shall be promptly delivered to it by CONSULTANT. 13. ASSIGNMENT AND DELEGATION This Agreement is a personal service contract and the work hereunder shall not be assigned, delegated or subcontracted by CONSULTANT to any other person or entity without the prior express written consent of CITY. If an assignment, delegation or subcontract is approved, all approved assignees, delegates and subconsultants must satisfy the insurance requirements as set forth in Sections 9 and 10 hereinabove. 14. COPYRIGHTS/PATENTS CITY shall own all rights to any patent or copyright on any work, item or material produced as a result of this Agreement. 15. CITY EMPLOYEES AND OFFICIALS CONSULTANT shall employ no CITY official nor any regular CITY employee in the work performed pursuant to this Agreement. No officer or employee of CITY shall have any agree/surfnet/professional svcs to$49 10115 6 of 11 financial interest in this Agreement in violation of the applicable provisions of the California Government Code. 16. NOTICES Any notices, certificates, or other communications hereunder shall be given either by personal delivery to CONSULTANT's agent (as designated in Section 1 hereinabove) or to CITY as the situation shall warrant,or by enclosing the same in a sealed envelope,postage prepaid, and depositing the same in the United States Postal Service, to the addresses specified below. CITY and CONSULTANT may designate different addresses to which subsequent notices, certificates or other communications will be sent by notifying the other party via personal delivery, a reputable overnight carrier or U. S. certified mail-return receipt requested: TO CITY: TO CONSULTANT: City of Huntington Beach Raftelis Financial Consultants, Inc. ATTN: Ken Dills ATTN: Sanjay Gaur 2000 Main Street 445 S. Figueroa Street, Suite 2270 Huntington Beach, CA 92648 Los Angeles, CA 90071 Tel: (212) 327-4405 Fax: (213) 262-9303 17. CONSENT When CITY's consent/approval is required under this Agreement, its consent/approval for one transaction or event shall not be deemed to be a consent/approval to any subsequent occurrence of the same or any other transaction or event. 18. MODIFICATION No waiver or modification of any language in this Agreement shall be valid unless in writing and duly executed by both parties. agree/surfnet/professional svcs to$49 10115 7 of 11 19. SECTION HEADINGS The titles, captions, section, paragraph and subject headings, and descriptive phrases at the beginning of the various sections in this Agreement are merely descriptive and are included solely for convenience of reference only and are not representative of matters included or excluded from such provisions, and do not interpret, define, limit or describe, or construe the intent of the parties or affect the construction or interpretation of any provision of this Agreement. 20. INTERPRETATION OF THIS AGREEMENT The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. If any provision of this Agreement is held by an arbitrator or court of competent jurisdiction to be unenforceable, void, illegal or invalid, such holding shall not invalidate or affect the remaining covenants and provisions of this Agreement. No covenant or provision shall be deemed dependent upon any other unless so expressly provided here. As used in this Agreement, the masculine or neuter gender and singular or plural number shall be deemed to include the other whenever the context so indicates or requires. Nothing contained herein shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provision contained herein and any present or future statute, law, ordinance or regulation contrary to which the parties have no right to contract, then the latter shall prevail, and the provision of this Agreement which is hereby affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law. 21. DUPLICATE ORIGINAL The original of this Agreement and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of agee/surfnet/professional svcs to$49 10115 8 of 11 the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any parry who has signed it. 22. IMMIGRATION CONSULTANT shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of the United States Code regarding employment verification. 23. LEGAL SERVICES SUBCONTRACTING PROHIBITED CONSULTANT and CITY agree that CITY is not liable for payment of any subcontractor work involving legal services, and that such legal services are expressly outside the scope of services contemplated hereunder. CONSULTANT understands that pursuant to Huntington Beach City Charter Section 309, the City Attorney is the exclusive legal counsel for CITY; and CITY shall not be liable for payment of any legal services expenses incurred by CONSULTANT. 24. ATTORNEY'S FEES In the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Agreement or to secure the performance hereof, each party shall bear its own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the nonprevailing party. 25. SURVIVAL Terms and conditions of this Agreement, which by their sense and context survive the expiration or termination of this Agreement, shall so survive. ae ee/surfnet/professional sves to$49 10115 9 of 11 26. GOVERNING LAW This Agreement shall be governed and construed in accordance with the laws of the State of California. 27. SIGNATORIES Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify CITY fully for any injuries or damages to CITY in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. 28. ENTIRETY The parties acknowledge and agree that they are entering into this Agreement freely and voluntarily following extensive arm's length negotiation, and that each has had the opportunity to consult with legal counsel prior to executing this Agreement. The parties also acknowledge and agree that no representations, inducements,promises, agreements or warranties, oral or otherwise, have been made by that party or anyone acting on that party's behalf, which are not embodied in this Agreement, and that that party has not executed this Agreement in reliance on any representation, inducement, promise, agreement, warranty, fact or circumstance not expressly set forth in this Agreement. This Agreement, and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Agreement, and supersede all prior understandings and agreements whether oral or in writing between the parties respecting the subject matter hereof. 29. EFFECTIVE DATE This Agreement shall be effective on the date of its approval by the City Attorney. This Agreement shall expire when terminated as provided herein. agree/surfnet/professional svcs to$49 10115 10 of 11 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers. CONSULTANT, CITY OF HUNTINGTON BEACH, a municipal corporation of the State of RAFTELIS FINANCIAL CONSULTANTS, California INC. COMPANY NAME B Director/Chief / Pursuant To HBMC 3.03.100 Y � ( IBC r�c! 3(c� APPROVED AS TO FORM: i 11 print name ITS: (circle one)Chairma residen ice President AND / Ci Attorney .Dkm 512LI(1 x� BY: /Date LO ��. Sa ry C RECEIVE AND FILE: pnntname ITS: (circle-one)-Secretary/Chief Financial Officer/Asst. �cretary—Treasure City Clerk Date 7 i agree/surfnet/professional svcs to$49 10115 11 of 11 EXHIBIT A ACt"G ROU N D AND PROJECT SUMMARY The City of Huntington Beach Capital Improvement Programs Maintenance—'Ihirty-three per- (City) owns and operates the including scheduled maintenance cent(33%)of the adopted annual sanitary sewer conveyance system and minor emergency repairs, budget; Capital Improvement serving most of its citizens. The inspection and cleaning of lines, Program—one-hundred percent system includes approximately maintenance of the City's 27 lift (1000/6) of the yearly average 360 miles of sewer piping ranging stations, design and construction future Capital Improvement from 6 to 30 inches in diameter, work,and a sewer lining program. Program for the following five approximately 10,000 pipelines, In January 2008,the City enacted years; and Emergency Reserve— and 27 lift stations. 'The collec- a policy regarding the repair and the amount equal to replace one tion system moves sewage to maintenance of sewer lateral sewer lift station($3 million). the Orange County Sanitation lines. The City is responsible for = District's (OCSD) trunk sewer the portion of all sewer laterals Using a Task Management system where it is transported from the City-owned sewer main Approach, RFC will perform a and treated at the OCSD's 312 through the public right-of-way financial analysis of the City's million gallons per day capacity to the private property line. The Sewer Service Fund using a Treatment Plant No.2. City adjusted sewer rates in 2008 cost of service approach. RFC to cover the cost of the sewer lat will provide a financial model in Funds collected from the sewer eral program. RFC will propose Microsoft Excel format.We will service fee are placed in a desig- new Proposition 218 compliant also provide a final report with hated Sewer Service Enterprise rates reflecting the reduced cost proposed rates that will clearly Fund(Fund)for find operations, of the sewer lateral program. show the nexus between the maintenance, and capital needs proposed charges and the cost of the sewer conveyance system. The City adopted a Sewer to provide service. Finally, RFC The Fund is subject to an annual Service Fund Reserve Policy will present at the Public Hear- review and performance audit by in FY2014/2015 to maintain ing to adopt the recommended the Public Works Commission. reserves equal to the sum of rates and will be available to The FY2015/2016 review listed the following: Operations and answer any questions. 9 R B B @ IICIPLEDENT'ATION PLAID The proposed project approach competent project management Sanjay Gaur,who will facilitate entails several distinct,yet interre- to ensure that all deadlines and a close working relationship lazed,work efforts that will require objectives are met in a timely and between City staff and the RFC effective coordination between efficient manner.We believe in a team, and who is accountable City staff and the RFC Team.We no-surprises approach so that the for meeting the technical stress communication, teamwork, client is aware of the status of the requirements of the project, objectivity, and accountability project Our approach includes the schedule,and budget for meeting project objectives. following: Staff availability to ensure `This task involves consistent and A strong Project Manager, timely completion of the 1 2 1 RAFTELIS FINANCIAL CONSULTANTS, INC. project. as reserve policies and debt ser- develop a customized rate model • Client involvement and vice covenants to determine the to assess different rate structure control by regular and open financial constraints with which customer impacts to facilitate communication between to build a financial plan. informed decision making. The the Project Team and City results wiull be summarized staff, including regular 2. FINANCIAL PLAN DEVEL- in both an easy-to-understand communication discussing OPMENT. We then determine graphical format and a tabular _ the tasks accomplished and future revenue needs(termed rev- format to ease communications identification of potential enue requirement) to sufficiently with elected officials. = problems and solutions. fund the utility's operation and _ • A quality assurance review of maintenance(O&M) and capital 5. RATE ADOPTION:In the last all study-related work. program.To ascertain the utility's step of the rate-setting process,to • Assurance of budget and financial condition, we evaluate comply with the Proposition 218 schedule control through current and projected revenues, requirements, study results are the Project Manager's use of expenses,and the appropriate use documented in a Study Report to RFC's project accounting and of debt. educate the public about the pro- management system. posed changes, the rationale and 3. COST OF SERVICE ANAL- justifications behind the changes, RFC project managers use Deltek YSIS: `Ilse annual costs of pro- and their anticipated financial im- Vision to monitor project progress viding sewer collection services is pacts. This will serve as the ad- and hours. Deltek Vision allows allocated among customer classes ministrative record to justify the each project manager to view pro- commensurate with their service proposed rate structure.At a pub- jeet budgets in real time to ensure requirements. In this step, costs lic hearing, 45 days after the City that projects stay on schedule and are identified and allocated to sends out the public notices, RFC on budget. cost components and distributed will present study recommenda- to respective customer classes per tions to assist the adoption of the RFC will work with City staff on the industry standards provided new wastewater rates. an ongoing basis via scheduled in the Water Environment Fed- in-person meetings and web con- eration's (WEF)Manual ofPrac- Stakeholder engagement early in ferences to cultivate a strong City ticeNo.27 the process is critical to ensure sense of ownership over the final public support of the study work product and results. RFC 4. RATE DESIGN: Rates do process and the policies ulti- will use the following five major more than simply recover costs. mately recommended to elected steps to develop utility rates that Properly designed rates support officials. We have found that comply with Proposition 218, and optimize a blend of various developing a plan with City staff industry standards,and City goals. utility objectives,such as afforda- at the outset of the project allows bility for essential needs,fairness stakeholder groups to participate 1.DUE DILIGENCE AND POLF and equity, revenue stability and in the policymaking process CY REVIEW: RFC will start the lastly ensure ease of implementa- and ensures deliverables will be rate-making process with a due tion. The rate development pro- designed to communicate the diligence phase to understand the cess is a public information tool results in a way that addresses underlying reason and/or goals that communicates the City's their concerns.This task involves for the rate study. This includes rate objectives to customers. In two steps: first, collaboration a kick-off meeting with City staff this step, RFC will design rates with City staff to determine key to ascertain goals and objectives. per industry standards that meet issues and stakeholder concerns; We will also review your policies the City's rate-setting objectives second, developing a communi- prior to the kick-off meeting-,such and are defensible. RFC will cation plan which aligns City CITY OF HUNTINGTON BEACH 3 and stakeholder objectives. The QA plan addresses two levels data request. We also expect of review and oversight:a detailed that the City Project Manager The results of the most compre- technical review of the models, will be able to schedule internal hensive study can be lost if RFC documents, and deliverables and meetings as necessary to review and the City do not attain consen- a second, broader conceptual study results. The City Project sus with the City's constituency. review of the approaches, and Manager will be responsible for Therefore, rate communications procedures used to develop the obtaining City review and com- _ must be clear, straightforward analyses. The Project Manager ment on the report. and simple. RFC has assisted will select a Staff Consultant hundreds of agencies with imple- to review the model technical At RFC, we strive to be the _ menting rates and is well known aspects to ensure that the model trusted advisor of utility mangers.for presenting thoughtful and is functioning properly. This As such, we are not the decision concise presentations. RFC will consultant is selected early in the makers. However, through our present both to the Public Works project and included from the advice, the decision makers will Commission and City Council to start so that he/she understands have the knowledge to make the present in an easily understanda- the project objectives and ensure best decision possible and know ble format the proposed changes that the model and other deliv- the pros and cons of each poten- to and rationale for the rates. erables effectively address those tial decision.We will first discuss RFC's presentations include visual objectives. Our Project Manager the rate study objectives with City graphics and our sstaff is skilled at is responsible for QA, which staff and together we will decide clearly and simply explaining the includes regular project reviews how best to approach and educate basics of rate setting. with members of our Project other stakeholders. Team as well as discussions with QUALITY ASSURANCE City staff. AND {QUALITY CONTROL RFC places a premium on pro- CITY STAFF ROLES viding high quality and accurate To complete the project, our deliverables.We have developed a expectation of City staff is that Quality Assurance(QA)plan that staff be available to answer ques- results in accurate deliverables. tions we may have regarding the SCOPE OF WORK TASK'1: PROJECT MANAGEMENT AND ' Discern the major drivers for We will provide a detailed data KICK-OFF MEE nNG the study. request list prior to the kick-off RFC will use the kick-off meet- • Discuss reserves and reserve meeting. The Project Team will ing to perform our due diligence policies. study this data thoroughly to to ensure that project stakehold- - Identify potential alternative understand the City's revenue ers agree to the project's goals, rate structures. streams, operating and capital approach, work plan, schedule, • Discuss debt policies for capital expenditures,customer base,and and the study's priorities. As funding and capital projects. sewer flow generation patterns to part of the in-person meeting, • Review the data request list perform the study in line with the RFC will: and pinpoint data gaps or City's overall objectives. questions. 1 4 \ RAFTELIS FINANCIAL CONSULTANTS, INC. Meetings/Workshops: One (1) The dashboard allows quick decision-making by visually on site kick—off meeting with staff displaying impacts of changes to selected variables. Defiverahles. Data request list, kick—off presentation in PowerPoint 2013 or later to guide discussion, ...... and meeting minutes TASK 2 FINANCIAL PLAN MODEL DEVELOPMENT During this task, RFC will project (using agreed upon infla bona ry factors) expenses such ................ . ....... as operating and maintenance (O&M) expenses, materials, capital expenditures,reserve con- tributions,and debt service. RFC will then estimate revenues based on current rates, sewer flow, and different funding sources hold two web-based workshops other non-operating. revenues to of CIP (PAYGO or debt with City staff. RFC and City determine the future financial financed) with flagging staff will review the model and health of the Sewer Enterprise features for errors or shortfalls. the assumptions for appropriate- assuming no change in current - Numerical results summarized ness, and finalize the financial rates. We will then determine in Pro-forma format. plan for the Sewer Enterprise. the revenue adjustments needed - Revenue adjustments required the finalized FPM will be used to cover all expenses-also known for the next five(or more)years to determine the cost of service as revenue requirements. to meet debt coverage and (COS) and subsequent rates. target reserve balance(s) The financial plan will be pre- - Projected operating costs and Meeting(s): Two (2) web-based sented in an easy-to-understand revenue streams(shown in the financialplan workshops with City format on an interactive dashboard Financial Plan chart). staff from Public Works and the which shows the impacts of vari- - Different funding sources Finance Department ous assumptions so that decisions of CIP, PAYGO, or debt Deliverable():Presentation materi- regarding revenue adjustments, financed (shown in the CIP als in Microsoft PowerPoint 2013 or capital financing through pay-go Expenditures chart). later and draftfinancial plan model or debt and reserve balances, can - Reserve balances and target in Microsqft Excel 2 013 or later be made quickly and efficiently. levels per City policies (shown Several features of the financial in the Reserves chart) with TASK 3—COST OF plan include: flagging features when SERVICE (COS)AND • Inputs for key variables projected balances fall below RATE CALCULATION including revenue adjustments, target levels. Following the development of capital program scenarios,and the financial plan, RFC will funding sources. An example of a model dashboard conduct a COS analysis. Based • Graphical presentations of is shown abovr_ on industry standards and projected operating costs methodologies approved by the and revenue streams, reserve After completing the financial Water Environment Federation balances and target levels, plan model (FPM), RFC will to ensure equitable rates that are CITY OF HUNTINGTON BEACH 5 compliant with Proposition 218. Meetings/Workshops: One (I) Sanjay Gaur, our Project Man- Cost allocations among cus- on-site meeting with City staff to ager, is consistently called upon tomer classes are based entirely discuss rate calculations and prelim- by industry associations such as on the flow of each class—since inary findings AWWA and ACWA to explain the City does not operate waste- Deliverables: Draft sewer rate to elected officials the complex - water treatment plants. model in Microsoft Excel 2013 or issues associated with alter- _ later native rate structures and has -_ Throughout the cost allocation extensive experience presenting process, RFC will comply with TASK 4—PUBLIC to utilities' governing bodies.the City's policy considerations WORKS COMMISSION The presentation will highlight _ and procedures, as well as cur- RATE WORKSHOP the collaborative process used to - rent federal, state, and local rules, Following the completion of the identify and prioritize the impor- regulations, and guidelines appli financial model and rates, RFC taut issues facing the City. cable to determining charges for will conduct a rate workshop with sewer service. Although we do the Public Works Commission. Meetings/Workshops: One (1) not provide legal advice, RFC is RFC will present proposed rates on-site meeting with City Council - very familiar with Proposition 218 and discuss the pros and cons Deliverables: Presentation mate- requirements and its implications of each rate structure. Changes rials in Microsoft PowerPoint 2013 on rates. Our Project Team has and suggestions from staff will or later extensive experience with Propo- be incorporated into the analyses sition 218 and cost of service rate prior to presenting the results to TASK S— DRAFT, FINAL design. We frequently present at the City Council. DRAFT AND FINAL various professional conferences REPORTS and have been quoted by the Los Meetings/Worksbops: One (1) The fifty percent (50010) draft Angeles Times on the matter. on-site meeting with Public Works report will describe the rate Commission development process. the draft After conducting the cost of ser- Deliverables: Presentation mate- report will include an execu- vice analysis, RFC will calculate rials in Microsoft PowerPoint 2013 tive summary highlighting the sewer rates for each customer or later major issues and decisions and class. RFC will develop a sewer an overview of operations, CIP, rate model with the flexibility TASK 5-- CITY COUNCIL the financial plan and the final to compare the advantages and RATE WORKSHOP rates. RFC will incorporate disadvantages of up to two rate Upon incorporating Public Work comments from City staff into structure alternatives. To assess Commission comments from the two subsequent progress drafts. the financial impacts of rate prior rate workshop, RFC will The final report and the model changes on the City's customers, present the study results during will reflect appropriate issues or RFC will calculate customer one working session with City concerns raised by stakeholders. impacts. Council. The presentation will The final report will serve as the discuss the proposed rate struc- City's administrative record and RFC will conduct one on-site ture and rates along with the will show how rates were derived. meeting with City staff to go resulting customer impact analy- over the rates and to prepare for sis.If necessary,RFC will use the Recent court decisions have the on-site rate workshop with model to address any concerns emphasized the importance for the City's Management Team. raised regarding the results.Any a thorough administrative record Comments received from City changes,comments,and feedback and defensible rate methodology. staff will be incorporated into the will then be incorporated into the The final report will detail all draft rate model. final model. rate design assumptions used \ & \ RAFTELIS FINANCIAL CONSULTANTS, INC. to develop the financial plan understandable manner and will available to answer any questions. and rates. the appendices will promote financial transparency We will explain the need for reve- include formal presentations and heighten legal defensibility. nue adjustments and fully explain delivered to Council. Meetings/Workshops:Phone calls the derivation of rates. RFC has as necessary to discuss the report assisted numerous agencies all = It is imperative that the report Deliverables:Draft reports,final over California with the adoption clearly shows the nexus between report in Microsoft Word 2013 or of sewer rates. _ the proposed charges and the cost later and pdf,fifteen (15) copies of to provide service.'Ihe report will all preliminary and draft reports Meetings/Workshops: One (1) - lead the reader through RFC's and up to 15 copies of final report Public Hearing methodology to arrive at rates that Deliverables: Proposition 218 are equitable, reflect the City's TASK 7— PROP 218 notice in Microsoft Word 2013 or policies and values,and are driven PUBLIC HEARING later; presentation materials for by the City's revenue require- Finally, RFC will present at Public Hearing in Microsoft Pow- ments. It will explain the rate the Public Hearing to adopt the erPoint 2013 or later development process in a clear and recommended rates and will be - PROPOSED SCHEDULE RFC will complete the scope of services within the timeframe shown in the schedule below. The proposed schedule assumes a notice-to-proceed by the beginning of May 2017, and that RFC will receive the needed data in a timely manner and be able to schedule meetings as necessary. Project completion is estimated for October 2017. August September TASK5 May June July October -- - - �NFa nt 14ck-off. - - - ext —-- :cai�d:maeiti+9iiildutes>_:,.__..--. ....._, .... �_-,..ter•. ....,cam._,., ...----:-:,_. _ - -_--- -- -_ ---- =---- - -----= -- ---_-- '" _ -=-= - - - _— arraal. Develop... ---' _....-.._ ........_._._... .. _ _ Fin ..•.:-c:r.---'-- - _ - �.�._,._.__ ...y- _-= '3eatr.FoteYvfade7,fnMlcrosojt .---_._, _..=_...:_:.:.�.._.._ •_,.__�--'-•-•--.�__:... ter:_.,:.....,..__._.,._. .,. ---- �_v - __ -- ----- --- — --- Ratr'Wor(ahb _...._._.._. c Works CommBsion - _ _ _ _ _ __ � .�Delty :Fresentatlon lnoigjaLilp Mfc(. :R_okYel'Yo17+t*t?D13 urlgtef_•=`=?.:+L-' °:.:!.5;�;;.:::•:-•:-::-�::-i:::'i�:.___.: __.------•_"�---`^-..,.:,>--:-.--_....,.._: ..�._.,.,-..�-...:..;^_c-.::rr.moo:,..;,,•_' _ - - .......... �^•_�per.. ... ...........__.....,.__..... .� ..,..:...�."i:i--:\,�.'i!•� s•P Artion"mWm M+cgsa - _ ___ _ _— _--_ - __ '-:: :V+�'_ i^%•'. ram'::__ �\-'�-^•i"i~..."--,< �'�e.�t:.:�,:-': %_~s-•_::_..T:,l'.`.. - _- - - "—_ - -- - - -- •F atothrt�m MSP -- - - - -- - ---- = '- - -- rs Kick-off Meeting Delivery of MWI/RMI Reports JLin-Person Meeting workshop web meeting CITY OF HUNTINGTON BEACH 7 EXHIBIT B k b FEE PROPOSAL Y Me following table shows our lump sum fee proposal for this project. The table provides a breakdown of the estimated level of effort required for completing each task described and the hourly billing rates for the _ personnel scheduled to complete the project. Expenses include costs associated with.travel, and a$10 per hour technology charge covering computers,networks,telepbones,postage,etc. ask Task Hours Requirements . . - PM TM SC Expenses :�._ a '-r`�--y�..�- ice, ..� �.•—� �,` �-,a�xT�.'�-•a. ` �4Jaiia ement Eck-off.1111eetf - r =. - — = ._,...= - ` �4R93 „tom T.. ..—.__._.. ._..n�... __._..,.,._._-._.._. ....... __.._.... _ - - — -- __—_- - - " :.rt..}.- • ._._.... , _-.__•-••_ --s•ice.__. �} .- _ - - _ - _- _- _ _ _ _ -_-•• _ ,.:-:____fir__.,,, ..:____,_._ ..:::•__._... - --.:•--- .:-:_.._�•_:- - - - - S.._ -__ - ...r.. •. -:....,----�"=cam._. :.x.,c_.:.:,-..-___.:. _ :M 1---.•:�.=+�v -..._ i..._t•� ..mom^-._.�_:r.�ti.,--. __-..:�;_..s.._.,.L .�,--.;.: c-o� - -- -- --_�.a�z".`.�i-�.�-=Ty,��s••.z..':.e.c;•..��[<rr"''en"�>-�t''f'���: slrv�t�F�.5�e. dal -oii�-- _e.., f- u Publu:�INtat-_ __ orksCommtssionRate:_ - _ : q: •:- G�_+.='':^1C!^v..__-�-:.--'"—cam• _-.-,_ r.:�:,- — ..,-fix.._,_ __ _ _ - �r=:��'•-`:'."v-M—�-w"'^m-�a=a•—G—r.-. �....—�_��•::,...:-.— _ _ _ -<.' — - - - - —_ - - - etc••,.-; ___ - .r.a.-;�:-'�-":[=a"._.__�c...'S.. _ T=:� "61lt�ean� - - 38P.0 - ------------- � 8 E PM-Sanjay Gaur(Vice President),Project Manager - TM-Steve Gagnon,PE(Manager),Task Manager SC-Staff Consultants 20 RAFTELIS FINANCIAL CONSULTANTS, INC. suo ', INSURANCE AND INDEMNIFICATION WAIVER ,48 MODIFICATION REQUEST 1. Requested by: Ken Dills 2. Date: June 5, 2017 3. Name of contractor/permittee: Raftelis Financial Consultants 4. Description of work to be performed: sewer rate study 5. Value and length of contract: $44,099, three year 6. Waiver/modification request: (5,000 deductible 7. Reason for request and why it Auld be granted: consulting work, primarily performed off site 8. Identify the risks to the City in approving this waiver/modification: none noted 6/5/17 Departmen Head Signature Date: APPROVALS Approvals must be obtained in the order listed on this form. Two approvals are required for a request to be granted. Approval from the City Manager's Office is only required if n Risk Management andithe City Attorney's Office disagree. 1. Risk Management �f` , � Approved ❑ Denied ---� ,- °J"C `✓ S!g9ature Date 2. City Attorney's Office Approved ❑ Denied At h-7 Signature ate 3. City Manager's Office ❑ Approved ❑ Denie Signature Date If approved, the completed waiver/modification request is to be submitted to the City Attorney's Office along with the contract for approval. Once the contract has been approved, this form is to be filed with the Risk Management Division of Human Resources Waiver Form Sewer Rate Studv.docx Rlril7nl7 R-9A-nn Ann DATE(MM/ ACC) L DD/YYYY)® CERTIFICATE OF LIABILITY INSURANCE 5/30/2017 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED,the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy,certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER CONTACT Pamela Morton NAME: Bear Insurance Service PHONED (704)982-1156 NC No:(704)982-7012 173 North Second Street E-MAIL ADDRESS:pmorton@bearinsurance.com INSURERS AFFORDING COVERAGE NAIC# Albemarle NC 28001 INSURERA:The Cincinnati Insurance Company 10677 INSURED INSURER B Old Re ublic Ins Co Raftelis Financial Consultants, Inc. INSURERC: 227 W Trade St INSURER D: Suite 1400 INSURER E: Charlotte NC 28202 INSURERF: COVERAGES CERTIFICATE NUMBER:2017 CA/FL REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR TYPE OF INSURANCE ADDL SUBR POLICY EFF POLICY EXP LTR POLICY NUMBER MM/DD MM/DD LIMITS X COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE $ 2,000,000 A CLAIMS-MADE [XI OCCUR DAMAGE TO RENTED 50,000 PREMISES Ea occurrence $ X Contractual Liab CAP5124411 1/21/2017 1/21/2018 MED EXP(Any one person) $ 10,000 No Liability Deductible PERSONAL&ADV INJURY $ 2,000,000 GEN'L AGGREGATE LIMIT APPLIES PER. GENERAL AGGREGATE $ 4,000,000 POLICY ]JECT LOC PRODUCTS-COMP/OP AGG $ 4,000,000 PRO- OTHER. $ AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT $ 1,000,000 Ea accident A ANY AUTO BODILY INJURY(Per person) $ ALL OWNED SCHEDULED CAP5124411 1/21/2017 1/21/2018 BODILY INJURY(Per accident) $ AUTOS AUTOS X X NON-OWNED No Liability Deductible PROPERTY DAMAGE $ HIRED AUTOS AUTOS Y Per accident X UMBRELLA LIAB X OCCUR EACH OCCURRENCE $ 4,000,000 A EXCESS LIAB CLAIMS-MADE AGGREGATE $ 4,000,000 DED I I RETENTION$ CAP5124411 1/21/2017 1/21/2018 $ WORKERS COMPENSATION X PER OTH- AND EMPLOYERS'LIABILITY Y/N STATUTE ER ANY PROPRIETOR/PARTNER/EXECUTIVE E.L EACH ACCIDENT $ 1,000,000 OFFICER/MEMBER EXCLUDED N N/A A (Mandatory in NH) WC1921777 (CA)(FL) 1/21/2017 1/21/2018 E.L.DISEASE-EA EMPLOYE $ 1,000,000 If yes,descnbe under DESCRIPTION OF OPERATIONS below I I I I I E.L DISEASE-POLICY LIMIT 1$ 1,000,000 B Professional Liability ALT72500 1/21/2017 1/21/2018 $2,000,000occurrence $25,000 ded Claims Made Policy Retro Date 3/4/94 $3,000,000aggregate DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES (ACORD 101,Additional Remarks Schedule,may be attached if more space is required) 30 day notice of cancellation except 10 days for non pay. F�PuHUVE sy: MICHAEL E.GATES CITY ATTORNEY CERTIFICATE HOLDER CANCELLATION N BEACH SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE City of Huntington Beach THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN 2000 Main Street ACCORDANCE WITH THE POLICY PROVISIONS. Huntington Beach, CA 92648 AUTHORIZED REPRESENTATIVE Pamela Morton/APRIL ©1988-2014 ACORD CORPORATION. All rights reserved. ACIDRD 25(2014/01) The ACORD name and logo are registered marks of ACORD INS025(201401 Consultants Providing Proposals Raftelis Financial Consultants Inc, 445 S. Figueroa Street, Suite 2270 Los Angeles, CA 90071 213-262-9300 Attn: Sanjay Gaur, Vice President Lechowicz +Tseng Municipal Consultants PO Box 3065 Oakland, CA 94609 510-545-3182 Attn: Alison Lechowicz, Principal CITY OF HUNTINGTON BEACH Professional Service Approval Form PART II RECEIVED MAY 0 5 2017 Date: 4/27/2017 Project Manager: Ken Dills Finance Department Requested by Name if different from Project Manager: Department: Public Works PARTS I & 11 OF THE PROFESSIONAL SERVICES CONTRACTS APPROVAL FORM MUST BE COMPLETED BY THE REQUESTING DEPARTMENT AND SIGNED FOR APPROVAL. PART I&Il MUST BE FILED WITH ALL APPROVED CONTRACTS. 1) Name of consultant: Raftelis Financial Consultants, Inc. 2) Contract Number: PWK (Contract numbers are obtained through Finance Administration x 5630) 3) Amount of this contract: $44,099 Account number Contractual Dollar Amount Business unit. object# Fiscal Year Fiscal Year Fiscal Year Fiscal Year 16/17 51185101.69300 $44,099 $ $ $ 4) Is this contract less than$50,000? ®Yes ❑ No 5) Does this contract fall within$50,000 and $100,000? ❑Yes ❑ No 6) Is this contract over$100,000? ❑Yes ❑ No (Note: Contracts requiring City Council Approval need to be signed by the Mayor and City Clerk. Make sure the appropriate signature page is attached to the contract-) 7) Were formal written proposals requested from at least three available qualified consultants? ® Yes ❑ No 8) Attach a list of consultants from whom proposals were requested (including a contact telephone number.) 9). Attach Exhibit A, which describes the proposed scope of work. 10) Attach Exhibit B, which describes the payment terms of the contract. "1__7--=--A 4" 1-1�__� !�;-- ( - (.-7 Department ad ,, Date Fiscal S anager(Purchasing) Date �)yBudget Hager Approval Signature Date 1A/'W / e 1 0 ( --) Chief Financial Officer(or designee)Signature bate professional service approval form part ii-raftelis.docx - PROFESSIONAL SERVI CES FISCAL YEAR'2016/17 PUBLIC WORKS De arfinent . ' Descri tion1 Amount. Engineering/Design, Inspection,/Construction Management, Development Review,Water Quality Testing,Water Conservation Support Services, Engineering Studies,Traffic Public Works Studies, Special Training Services, Litigation Services,Water Rate Study, Billing System Implementation Assistance, NPDES/FOG inspection Services,Arborist Services and other consulting and professional services. $3,855 000.00'i Date, Vendor .. `.-AmounE Contract Value Notes FY17/18 FY 18/19 9/16/2015 Bucknam Infrastructure Group $ 10,000 $ 86,000 3 year Inter-Agency contract via City of Palmdale 2/16/2016 SCADA programming&engineering $ 300,000 $ 900,000 3 year contract @$300K annually($175K FYI 5116$125K FY 18/19) $ 300,000 $125,000 2/17/2016 KEVA Engineering $ 10,000 $ 20,000 Expires FYI 6/17 3/9/2016 Gibbs Giden Locher $ 290,000 $ 49,000 Sewer lift station lawsuit 6/29/2016 Kane Ballmer $ 45,000 $ 75,000 Sewer lift station lawsuit 4/1/2016 --On Call Construction Mgmt- $ 1,225,000 $ 2,550,000 $1,225M each in years 2 and 3-NTE$2,550,000 $ 1,225,000 4/1/2016 --On call materials Testing- $ 200,000 $ 450,000 $200K each in years 2 and 3-NTE$450,000 $ 200,000 10/10/2016 Davis Farr-Audit Services $ 5,000 $ 144,900 WOCWB audit services-awarded via Finance RFP $ 5,100 $ 5,200 10/11/2016 --On call Env Engineering--PACE $ 16,000 $ 325,000 $ 150,000 $160,000 10/11/2016 -On call Env Engineering-Huitt-Zollars $ 15,000 $ 325,000 $ 150,000 $160,000 10/11/2016 -On call Env Engineering-Tetra Tech $ 15,000 $ 325,000 $ 150,000 $160,000 10/11/2016 -On call Env Engineering-Geosyntec $ 15,000 $ 225,000 $ 105,000 $105,000 10/11/2016 -On call Env Engineering-EEC Env. $ 15,000 $ 225,000 $ 105,000 $105,000 11/16/2016 Woodruff,Spradlin&Smart $ 45,000 $ 90,000 Atlanta Widening-eminent domain legal services $ 45,000 1 211 61201 6 Go Live Technology $ 15,000 $ 200,000 split with non-departmental and ELM project $ 35,000 5/4/2017 Raftelis $ 44,099 $ 44,099 Sewer rate Study for FYI6117 JTdtaV%t ;;; $ 2,264,099 Balance) $ 1,590,901 City of Huntington Beach 2000 Main Street ♦ Huntington Beach, CA 92648 (714) 536-5227 ♦ www.huntingtonbeachca.gov ge,i 190940 ` Office of the City Clerk Robin Estanislau, City Clerk June 8, 2017 Raftelis Financial Consultants, Inc. Attn: Sanjay Gaur 445 S. Figueroa Street, Suite 2270 Los Angeles, CA 90071 Dear Mr. Gaur: Enclosed is a copy of the fully executed "Professional Services Contract Between the City of Huntington Beach and Raftelis Financial Consultants, Inc. for Sanitary Sewer Fee Study." Sincerely, �&4w4AO Robin Estanislau, CIVIC City Clerk RE:pe Enclosure Sister Cities: Anjo, Japan ♦ Waitakere, New Zealand