Full Text
ATTACHMENT 1 AGREEMENT FOR PROFESSIONAL SERVICES FOR WATER AND SEWER UTILITIES RATE STUDY UPDATES AND COMPREHENSIVE RATE STUDY FOR SOLID WASTE UTILITY BETWEEN CITY OF MOSCOW, IDAHO AND FINANCIAL CONSULTING SOLUTIONS GROUP, INC THIS AGREEMENT FOR PROFESSIONAL SERVICES FOR RATE STUDY UPDATES FOR WATER AND SEWER UTILITIES AND COMPREHENSIVE RATE STUDY FOR SOI_;lD WASTE UTILITY (hereinafter "this Agreement"), made and entered into this ` day of febrU 20 lL by and between City of Moscow, Idaho, a municipal corporation of the State f Idaho, 206 East Third Street, Moscow, Idaho, 83843 (hereinafter "CITY"), and Financial Consulting Solutions Group, Inc., a corporation of the State of Washington, with offices located at 7525 166lh Ave NE, Suite D-215, Redmond, W A 98052, (hereinafter "CONSULTANT"). W I T N E S S E T H: WHEREAS, CITY intends to develop an updated Rate Study for Water and Sewer Utilities and develop a Comprehensive Rate Study for the Solid Waste Utility pursuant to the Scope ofWork and Schedule (hereinafter "the Project"); and WHEREAS, CONSULT ANT agrees to perfonn the various professional services required for the PROJECT; NOW, THEREFORE, it is agreed that for and in consideration of the mutual covenants and promises between the parties hereto, that: SECTION 1 Scope of Work for Consulting Services CONSULTANT shall furnish the following consulting services for the PROJECT as outlined in Attachment (detailed Scope of Services) of this Agreement, which is adopted and incorporated herein and as described generally below: Preparation of a Rate Study update for Water and Sewer Utilities and Comprehensive Rate Study for the Solid Waste Utility in accordance with the detailed Scope of Services. SECTION2 A. Fees and conditions for Consulting Services Professional Services Agreement Page 1 2..D\\·Ol9 ---PAGE BREAK--- Maximum Costs for Basic Consulting Services Under Section I of this Agreement. The total cost to CITY for Consulting Services for the PROJECT as described in Section 1, shall be an amount not to exceed $131,565 for work performed by Consultant as shown in Attachment of this Agreement. SECTION3 A. Independent Contractor CITY and CONSULT ANT hereto warrant by their signature that no employer/employee relationship is established between CITY and CONSULTANT by the terms of this Agreement. It is understood by the parties hereto that CONSULTANT is an independent contractor and, as such, neither it nor its employees, if any, are employees of CITY for purposes of tax, retirement system, or social security (FICA) withholding. B. Termination of Agreement This Agreement may be tenninated by CONSULTANT upon thirty (30) days prior written notice, should CITY fail to substantially perform in accordance with its terms through no fault of CONSULT ANT. CITY may terminate this Agreement with thirty (30) days notice without cause and without further liability to CONSULTANT except as designated by this Section. In the event of termination, CONSULTANT shall be paid for services performed to termination date, including direct expense and including a percentage of the Fee set out in Section 2 of this Agreement, based upon work completed. All Deliverables, whether partially or fully completed, related to the PROJECT produced by CONSULT ANT as part of PROJECT services shall become the property of, and shall surrender to, CITY at or before such termination. However, the CITY agrees that all deliverables provided or prepared by the CONSULTANT are intended for the purposes of this Agreement only and any reuse or modification of the Deliverables by the CITY or others for any other project or purpose shall be at the CITY's or other's sole risk and without liability to the CONSULTANT. CONSULTANT may retain copies of all deliverables for its records. C. Extent of Agreement This Agreement may be amended only by written instrument signed by both parties hereto. D. Data of Record CITY shall make available to CONSULTANT all technical data of record in CITY's possession required by CONSULTANT relating to this PROJECT. E. Termination of the PROJECT Professional Services Agreement Page2 ---PAGE BREAK--- If any portion of the PROJECT covered by this Agreement shall be suspended, abated, abandoned or terminated, CITY shall pay CONSULTANT for the services rendered to the date of such suspended, abated, abandoned or terminated work; the payment to be based, insofar as possible, on the amounts established in this Agreement or, where this Agreement cannot be applied, the payment shall be based upon a reasonable estimate as mutually agreed upon between the two parties as to the percentage of the work completed. F. CITY's Responsibility for Special Costs and Rights-of-Way CITY shall pay for all costs for obtaining licenses and permits that may be required by local, State, and Federal authorities; and shall be responsible for securing necessary land, easements, and rights-of-way, where applicable. G. CONSULT ANTS's Professional Liability Insurance In performance of professional services, CONSULT ANT will use that degree of care and skill ordinarily exercised under similar circumstances by members of the consulting profession; and no warranty, either expressed or implied, is made in connection with rendering CONSULT ANT's services. Should CONSULTANT or any of CONSULTANT's agents or employees be found to have been negligent in the performance of professional services from which CITY sustains damage, CONSULTANT has obtained Professional Liability Insurance in the amount of One Million Dollars ($1,000,000), and said insurance shall be held active for a two year (minimum) period from the date of completion of the PROJECT. CITY shall receive notice of any pending termination of said insurance within five days of first notice to CONSULT ANT. H. CONSULTANT's Additional Insurance CONSULTANT shall maintain automobile insurance and statutory workers' compensation insurance coverage, employer's liability, and comprehensive general liability insurance coverage. The comprehensive general liability insurance shall have a minimum limit of Five Hundred Thousand Dollars ($500,000) per claim and One Million Dollars ($1,000,000) aggregate, and CONSULTANT shall cause CITY to be named as an additional insured under said policy. I. Indemnification CONSULTANT agrees, to the fullest extent permitted by law, to indemnify and hold harmless CITY against damages, liability and costs arising from the negligent acts of CONSULT ANT in the performance of professional services under this Agreement, to the extent that CONSULTANT is responsible for such damages, liabilities and costs on a comparative basis of fault and responsibility between CONSULTANT and Professional Services Agreement Page3 ---PAGE BREAK--- CITY. CONSULTANT shall not be obligated to indemnify CITY for CITY's own negligence. J. Costs and Attorney Fees In the event either party incurs legal expenses to enforce the tenns and conditions of this Agreement, the prevailing party is entitled to recover reasonable attorney's fees and other costs and expenses, whether the same are incurred with or without suit. K. Jurisdiction and Venue It is agreed that this Agreement shall be construed under and governed by the laws of the State of Idaho. In the event of litigation concerning it, it is agreed that proper venue shall be the District Court of the Second Judicial District of the State of Idaho, in and for the County of Latah. L. Binding of Successors CITY and CONSULT ANT each bind themselves, their partners, successors, assigns, and legal representatives to the other parties to this Agreement and to the partner, successors, assigns and legal representatives of such other parties with respect to all covenants of this Agreement. M. Modification and Assignability of Agreement This Agreement contains the entire agreement between the parties concerning the PROJECT, and no statements, promises, or inducements made by either party, or agents of either party, are valid or binding unless contained herein. This Agreement may not be enlarged, modified, or altered except upon written agreement signed by the parties hereto. CONSULTANT may not subcontract or assign their rights (including the right to compensation) or duties arising hereunder without the prior written consent and express authorization of CITY. Any such subcontractor or assignee shall be bound by all of the terms and conditions of this Agreement as if named specifically herein. N. CITY's Representative CITY shall designate a representative authorized to act in behalf of CITY. The authorized representative shall examine the documents of the work as necessary, and shall render decisions related thereto in a timely manner so as to avoid unreasonable delays. 0. Conflict oflnterest CONSULT ANT covenants that it presently has no interest and will not acquire any interest, direct or indirect, in the PROJECT which would conflict in any manner or Professional SeJVices Agreement Page4 ---PAGE BREAK--- degree with the performance of services hereunder. CONSULT ANT further covenants that, in performing this Agreement, it will employ no person who has any such interest. P. Non-Discrimination CONSULT ANT shall not discriminate against any employee or applicant for employment on the basis of race, color, religion, creed, political ideals, sex, age, marital status, physical or mental handicap, or national origin. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date indicated above. CONSULTANT Financial Consulting Solutions Group, Inc. D Angie chez Vimoche, Principal Principal/Project Manager CITY City of Moscow, Idaho DATED this s.?.J.h day of Fe.br-uctJ , 20lJ.. ACKNOWLEDGMENT STATE OF Wets '"fo n ) ) ss: County of i ) On this day of 'F"'-cb Y , 20.D_, before me, a Notary Public in and for said State, appeared .AJ; c· S lto1/lcbz:_ , known to me to be the person named above and cknowledged t at he executed the foregomg as the duly authonzed representative of GoaErf,j Qn.ru/tz;,J stJ/uMoN Grou,n, Jh c . • 'bR P .1 Y. • ' Z - ! -U'li AA'r \ \ W K . X j Y \ 1 " Q· - 0L 'llliJI Professional Services Agreement PageS ---PAGE BREAK--- EXHIBIT A SCOPE OF SERVICES The purpose of this scope of work is to provide consulting services related to the water and sewer utilities rate study updates and comprehensive rate study for the solid waste utility. The specific tasks to be performed will include the following: TASK 1 -PROJECT KICKOFF FCS GROUP will schedule a project kickoff meeting before the commencement of the project with the consultant project team, Moscow key project personnel, and decision makers. Ideally this would include a representative from finance, engineering, customer service and administration. TASK 2- DATA COLLECTION/VALIDATION FCS GROUP will provide a data needs Jist encompassing historical and projected financial, operational, billing and planning information. The data wiJI be reviewed, analyzed and validated for inclusion in the study process. Of particular emphasis will be validating the customer billing statistics with the revenue generated. TASK 3- REVENUE NEEDS This task forms a complete portrayal of each utility's independent revenue needs and links directly with the operational/capital drivers of the system - yielding a basis for setting rates. Subconsultant CH2M Hill will lead the work related to operational efficiencies in coordination with City staff and the findings from the solid waste strategies plan and the residential refuse audit that may result in cost change from existing budget levels. Revenue needs are established by analyzing the following: a. Integrate cash, coverage and fund balance requirements from existing or recommended fiscal policies b, Forecast annual operating expenditures and revenues for the planning horizon. Budget estimates will be used as a baseline for projecting future costs and revenues. Model financial impacts resulting from any known or anticipated operational cost additions or savings such as solid waste operational changes, conservation program cost increases, biosolids disposal, and/or other regulatory requirements. c. IncorJ>orate the City's existing debt issues and any anticipated new issues in the revenue requirement. Debt service coverage requirements will be monitored. d. Identify the full operating and capital costs for each utility and conduct a test of sufficiency that compares those needs against available rate and miscellaneous operating revenues, identifying any projected shortfalls over the forecast period. e. Develop rate strategies that meet financial obligations for the time period elected and provide smooth impacts to utility customers. f. Evaluate alternative scenarios that may alter the results of the revenue needs forecast. g. A baseline rate strategy will be developed in addition to up to two additional scenarios for each utility to evaluate the various changes and/or increases in service levels/costs. ---PAGE BREAK--- For the solid waste utility two separate analysis will be completed; 1) Operational efficiency analysis and implementation planning. 2) High level audit of revenue collection procedures. h. The solid waste utility operational efficiency analysis includes: • Obtain and review the City's strategic plan and supporting data • Conference call with City staff to clarify the assumptions and rationale behind the plan and engage the City in a discussion about key implementation issues associated with the plan including capital and operations funding constraints, labor requirements and constraints, potential contractual modifications, and additional analysis and decisions required to implement the plan. • FCSG to perform onsite reviews and data collection if necessary and provide information back to CH2MHll..L staff for analysis. • Evaluate the key implementation issues identified in the initial call. • Develop and submit a draft technical memorandum to support the City's strategic plan. The memorandum will include: - Capital and operations and maintenance funding by year Identification of potential timing concerns - An independent review of the cost estimates included in the strategic plan. - Recommendations for changes that may be necessary to contracts or facilities to fully implement the plan The results of the technical memorandum will be used as inputs to the cost of service and rate design tasks. • Conference call with City staff to discuss the draft technical memorandum, and finalize based on feedback received in that call, i. The solid waste high level audit of revenue collection procedures and identification of revenue leakage includes: • Obtain copies of existing contracts and relevant operational data about the solid waste system. • Conference call with City staff to discuss proposed improvements to revenue collection procedures. • Analyze the information obtained about the City's collection, recycling, landfi11, and transfer systems and look for potential sources of revenue leakage. • Evaluate the potential for revenue increases from revenue collection improvements proposed by the City and any additional improvements identified during our revenue leakage analysis. • Review conceptual cost estimates of labor or equipment necessary to implement the improvements. • Present results of this analysis in a draft technical memorandum. • Conference call with City staff to discuss the proposed revenue collection improvement methods and agree upon which methods should be implemented, and the cost and revenue potential of each method. After the City decides on any proposed revenue collection improvement methods that will be implemented, prepare a final technical memorandum. TASK 4- COST-OF-SERVICE This evaluation will provide a defensible basis for assigning "cost shares" and establishing "equity" for system customers with the development of a series of allocations, based on ---PAGE BREAK--- customer data, engineering/plalllling criteria, and judgment, to assign utility cost recovery to customers in proportion to their actual demands. a. Determine the appropriate grouping of customers or level of service to review. b. Functionalize, classify and allocate costs to customer classes. c, CH2M Hill will review the existing studies that address the proper apportiorunent of sewer costs to the University of Idaho based on hydraulic, organic and process loadings. Any changes in cost classification or allocation identified by CH2M Hill will be discussed with the City before being incorporated into the analysis. A cursory review of the strength factors (biochemical oxygen demand and total suspended solids) used for other classes of service will also be conducted. d. Each functional cost pool developed above will be distributed to each existing customer class/service group based on the class/group demands and facility requirements. The results will identify any warranted shifts in cost burden from the existing rate structure that could improve equity. e. The cost of service will provide the unit cost for each major utility service function and will serve as the building block for rate design. TASK 5- RATE DESIGN This task includes the generation of alternative rate design structures for each service. The rate design options will be developed to be consistent with the City's fiscal policies, generate sufficient revenue to meet the revenue requirement forecast and begin to address any inequities identified in the cost-of-service findings. Specific items for consideration may include the following; Water service a) Continue to make progress moving the base meter equivalency factors, by meter size to the full American Water Works Association meter factors. b) Evaluate if the block sizes in the tiered block rate structure require refinement. c) Review the rate differences between blocks and associated revenue generation to assess revenue stability. d) Identify fixed and variable revenue generation Sewer service a) Review overall rate structures b) Identify interest in development of a flow based residential rate structure. c) Address any lingering issues with multi-use rates. d) Evaluate revenue stability via fixed and variable revenue generation. Solid Waste Utility a) Evaluate the base access fee, service level fee and tag service fee a) Establish rates by container size (can, dumpster, etc.) for regular service. b) Establish rates for commercial can and dumpsters by size and number of pickups per week. c) Identify costs/rate associated with recycling and yard waste, if applicable. d) Discuss solid waste rates to identify areas of consolidation, expansion and ---PAGE BREAK--- refinement. Bill Comparisons will be generated describing the number of and degree to which different customers are impacted by changes in the current rate structures. We will prepare a comparison of the impact of each rate structure (including the existing rate structure) on typical bills of representative customers from each customer class. TASK 6- MEETINGS AND PRESENTATIONS FCS GROUP will prepare for and facilitate the following meetings and presentations. a. Meet with City project team in up to four ( 4) on-site meetings to review study results at key milestones. We anticipate the following review meetings; One meeting to review revenue needs One meeting to review solid waste operational efficiencies and revenue audit. One meeting to review cost of service results/findings; One meeting to review rate design. b. Up to three meet with Rate Committee and/or City Council at key project milestones. c. One presentation of study findings and recommendations at a public hearing d. A total of nine meetings (including the task I project kick off meeting) are included for the project. e. Another option for review meetings with the project team is via the interactive computer program "Go-To-Meeting" over a conference call. Go-To-Meeting allows all parties to view documents via an internet connection and see edits and changes made to a shared document in real time. Go-To-Meeting has been used recently with our clients with very positive results. TASK 7- DOCUMENTATION FCS GROUP will prepare and submit the following project documentation . Three hard copy draft reports documenting the rate study process, methodology and conclusions for comment by the City. An electronic reproducible copy will also be provided . Up to ten (10) bound copies of the final report with technical appendices of rate model exhibits for each utility . An electronic copy of the Microsoft Excel spreadsheet rate model for each utiHty. ---PAGE BREAK--- EXHIBIT A BUDGET 8 2 12 10 2 32 2 8 2 2 12 16 4 116 32 32 2 8 45 30 2B 145 2 2B 32 36 <407 16 30 6 40 53 44 38 181 2 6 30 40 8 10 6 28 « 40 8 48 45 8 53 52 99 16 642 .$99.665 16 10 74 12570 8 10 50 8.690 8 48 6-390