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December 12,2006 AGREEMENT FOR CONSULTING SERVICES BETWEEN CITY OF MOSCOW, IDAHO AND HDR ENGINEERING, INC. Don Palmer, Finance Director City of Moscow 206 E. Third Street Moscow, ID 83843 SUBJECT: Consultant Services Agreement Project Name: City of Moscow Sewer Rate Update Dear Mr. Palmer: This Agreement is made on December 12, 2006 between the City of Moscow ("City") and HDR Engineering, Inc. in order to provide an update to the City's commercial sewer rates and a review of the mixed-use rate structure ("Project"). HDR will perform services as described on Attachment under the terms described below: City will pay for HDR's services, after receipt of invoice, on a time and materials basis. All services shall be performed by HDR in accordance with generally accepted standards of professional care and in compliance with all laws and regulations. HDR makes no warranties, express or implied, under this Agreement or otherwise, in connection with HDR's services. City shall provide all criteria and information pertaining to City's requirements for the Project, including design objectives and constraints, space, capacity and performance requirements, and any budgetary limitations. All standard applicable specifications and/or bidding documents shall be provided to HDR by City. HDR shall maintain the following insurance coverage during the performance of HDR services on the Project: Worker's Compensation insurance as required by law; Employer's Liability insurance; Commercial General Liability (combined single limit) for personal and property damage with limits not less than $500,000; and, Automobile Liability insurance (combined single limit) for bodily injury and property damage covering all vehicles, owned and non-owned with limits not less than $500,000. HDR's total liability to City for any loss or damage, including but not limited to special and consequential damages arising out of or in connection with the performance of services or any other cause, including HDR's professional negligent acts, errors or omissions, shall not exceed the greater of fifty thousand dollars ($50,000) or the total compensation received by HDR on this 2006-43 ---PAGE BREAK--- Agreement For Consulting Services Page 2 Project. City hereby releases and holds harmless HDR from any liability above fifty thousand dollars ($50,000). The rates of compensation for HDR's services have been agreed to in anticipation of the orderly and continuous progress of the Project through completion. If any specified dates for the completion of HDR's services are exceeded, through no fault of HDR, the time and compensation shall be adjusted to reflect such changes. Either party may terminate this Agreement, in whole or part, by giving seven days written notice. Final invoice shall include all services and expenses associated with Project up until effective date of termination. Any other expenses for verification or adaptation shall be compensated at a mutually agreed upon amount. This Agreement is to be governed by the law of the State ofldaho. The terms and conditions contained in this Agreement represent the entire understanding between City and HDR concerning HDR's services on the Project. This Agreement may only be modified in writing, signed by both authorized representatives of both companies. HDR looks forward to working with you on this Project. If the terms of this Agreement are acceptable, please sign this letter in the space provided below and return it to me by November 28, 2006. Very truly yours, HDR ENGINEERING, INC. ("HDR") By: Dave Peters, Senior Vice President CITY: By: Les MacDonald, Public Works Director ATTEST: ---PAGE BREAK--- ATTACHMENT A Subject: Proposal to provide an update to the sewer rates This Attachment A is in response to your call requesting technical assistance from HDR Engineering, Inc. ("HDR") in revising the current sewer rates for the commercial customer class of service, and providing alternatives to the current mixed-use rate structure. This Attachment A will outline the proposed scope of services being requested by the City of Moscow, Idaho ("City"), along with HDR's estimated fees and time schedule to provide this technical assistance. Recently, HDR provided City with water and sewer rates with a strong conservation price signal. A portion of the previously fixed sewer revenues are now collected through both a fixed fee and a volume eharge based on water consumption. Following the completion of the rate model and development of the rates, City has had numerous requests from customers to review the commercial sewer rate structure to consider an adjustment to the current structure to stabilize the revenue stream. The following tasks comprise the approach HDR will utilize to complete the services requested by City. Task 1 - Data Collection -City shall provide the metered water consumption data for the most recent twelve (12) month period for the commercial and mixed-use classes of service. Such data will be the basis for updating City rates. If additional data is needed, HDR shall contact City. Task 2 - Update the Current Sewer Rates - HDR shall provide up to two variations in addition to the existing commercial rate structure and up to two variations on the rate structure for the mixed-use customers in addition to the existing rate structure. Rates will be designed around current revenue and consumption levels. At the end of this analysis, HDR shall provide City with revised rates for the 2006-2007 time period that can be adjusted annually based on the previously developed rate transition plan. Task 3 - Meetings/Presentations - HDR shall prepare to meet with City stafl: as well as prepare for and attend two meetings. The meetings shall be with the Public Works Finance committee and either with the Rate Committee or City Council. The fee schedule has assumed these meetings would occur on the same day to reduce the travel related expenses. Task 4 - Written Documentation - HDR shall provide City with a technical memorandum discussing the analysis and revised sewer rates. This memorandum shall further address analysis of whether the sewer rate for "Other Commercial" will meet the proposed target revenue stated in the original rate study. Should City desire any additional services outside of this scope, such services may be provided at the hourly billing rates included below. Project Schedule -City has requested technical assistance outlined herein to be completed by January 16, 2006. HDR shall attempt to complete the analysis by that time; however, this target ---PAGE BREAK--- date is based on HDR staff availability and City's ability to provide the data and to respond to questions/issues and to make decisions relating to rate structure discussions in a timely manner. Proposed Project Staffing and Budget - Shawn Koorn - Project manager, and Kevin Lorentzen - financial analyst, will provide the bulk of the requested services, with as-needed assistance from other HDR office staff. The cost of this Project shall not exceed four thousand four hundred and forty-nine dollars ($4,449).