HomeMy WebLinkAboutThe Reed Group, Inc 2014-04-21 CONTRACT #1314214
AGREEMENTFOR i
PROFESSIONAL CONSULTING SERVICES �
This Agreement, made and entered into this 21st day of Aqril, 2014 ("Effective Date"), by
and between CITY OF UKIAH, CALIFORNIA, hereinafter referred to as "City" and The Reed
Group, Inc., a corporation organized and in good standing under the laws of the state of
California, hereinafter referred to as "ConsultanY'.
RECITALS
This Agreement is predicated on the following facts:
a. City requires consulting services related to preparation of a water rate study.
b. Consultant represents that it has the qualifications, skills, experience and properly
licensed to provide these services, and is willing to provide them according to the terms
of this Agreement.
c. City and Consultant agree upon the Scope-of-Work attached hereto as Attachment "A"
and Work Schedule attached hereto as Attachment "C", describing contract provisions
for the project and setting forth the completion dates for the various services to be
provided pursuant to this Agreement.
TERMS OF AGREEMENT
1.0 DESCRIPTION OF PROJECT
1.1 The Project is described in detail in the attached Scope-of-Work (Attachment "A"). I
2.0 SCOPE OF SERVICES
2.1 As set forth in Attachment "A".
2.2. Additional Services. Additional services, if any, shall only proceed upon written i
agreement between City and Consultant. The written Agreement shall be in the form of
an Amendment to this Agreement.
3.0 CONDUCT OF WORK
3.1 Time of Completion. Consultant shall commence performance of services as required
by the Scope-of-Work upon receipt of a Notice to Proceed from City and shall complete
such services within 180 davs from receipt of the Notice to Proceed. Consultant shall
complete the work to the Citys reasonable satisfaction, even if contract disputes arise or
Consultant contends it is entitled to further compensation. Attachment "C" sets forth the
expected schedule for the services to be provided.
4.0 COMPENSATION FOR SERVICES
4.1 Basis for Compensation. For the performance of the professional services of this
Agreement, Consultant shall be compensated on a time and expense basis not to
exceed a guaranteed maximum dollar amount of $41,425.00. Labor charges shall be
based upon hourly billing rates for the various classifications of personnel employed by
Consultant to perform the Scope of Work as set forth in the attached Attachment B,
�„� P�o��..„�e„�,,,.�,�-.,,.�„��.„��.���N I
PAGEIOF) �
I
I
CONTRACT #1314214
i which shall indude all indirect costs and expenses of every kind or nature, except direct
expenses. The direct expenses and the fees to be charged for same shall be as set ,
forth in Attachment B. Consultant shall complete the Scope of Work for the not-to-
exceed guaranteed maximum, even if actual time and expenses exceed that amount.
4.2 Chanqes. Should changes in compensation be required because of changes to the
Scope-of-Work of this Agreement, the parties shall agree in writing to any changes in
compensation. "Changes to the Scope-of-Work" means different activities than those
described in Attachment "A" and not additional time to complete those activities than the
parties anticipated on the date they entered this Agreement.
4.3 Sub-contractor Pavment. The use of sub-consultants or other services to perform a I
portion of the work of this Agreement shall be approved by City prior to commencement i
of work. The cost of sub-consultants shall be included within guaranteed not-to-exceed �
amount set forth in Section 4.1.
4.4 Terms of Pavment. Payment to Consultant for services rendered in accordance with this
contract shall be based upon submission of monthly invoices for the work satisfactorily
performed prior to the date of the invoice less any amount already paid to Consultant,
which amounts shall be due and payable thirty (30) days after receipt by City. The
invoices shall provide a description of each item of work performed, the time expended
to perform each task, the fees charged for that task, and the direct expenses incurred I
and billed for. Invoices shall be accompanied by documentation sufficient to enable City
to determine progress made and to support the expenses claimed. i
5.0 ASSURANCES OF CONSULTANT
5.1 Independent Contractor. Consultant is an independent contractor and is solely
responsible for its acts or omissions. Consultant (including its agents, servants, and
employees) is not the Citys agent, employee, or representative for any purpose.
It is the express intention of the parties hereto that Consultant is an independent
contractor and not an employee, joint venturer, or partner of City for any purpose
whatsoever. City shall have no right to, and shall not control the manner or prescribe the
method of accomplishing those services contracted to and performed by Consultant
under this Agreement, and the general public and all governmental agencies regulating
such activity shall be so informed.
Those provisions of this Agreement that reserve ultimate authority in City have been
inserted solely to achieve compliance with federal and state laws, rules, regulations, and
interpretations thereof. No such provisions and no other provisions of this Agreement
shall be interpreted or construed as creating or establishing the relationship of employer
and employee between Consultant and City.
Consultant shall pay all estimated and actual federal and state income and self-
employment taxes that are due the state and federal government and shall furnish and I
pay worker's compensation insurance, unemployment insurance and any other benefits
required by law for himself and his employees, if any. Consultant agrees to indemnify
and hold City and its officers, agents and employees harmless from and against any
claims or demands by federal, state or local government agencies for any such taxes or
benefits due but not paid by Consultant, including the legal costs associated with
defending against any audit, claim, demand or law suit.
5W PmiSwsnam mem-NO..mh�r?u.'.Onx
PAGE2OPl
i
I -- . _.. — _ _ __- - .._ _ _- - ..__-_ .JI
CONTRACT #1314214 �
I I
' Consultant warrants and represents that it is a properly licensed professional or ,
professional organization with a substantial investment in its business and that it i
maintains its own offices and staff which it will use in performing under this Agreement. I
5.2 Conflict of Interest. Consultant understands that its professional responsibility is solely
to City. Consultant has no interest and will not acquire any direct or indirect interest that '
would conflict with its performance of the Agreement. Consultant shall not in the
performance of this Agreement employ a person having such an interest. If the City
Manager determines that the Consultant has a disclosure obligation under the City's
local conflict of interest code, the Consultant shall file the required disclosure form with
the City Clerk within 10 days of being notified of the City Manager's determination.
6.0 INDEMNIFICATION
6.1 Insurance Liabilitv. Without limiting ConsultanYs obligations arising under Paragraph 62 I
Consultant shall not begin work under this Agreement until it procures and maintains for
the full period of time allowed by law, surviving the termination of this Agreement
insurance against claims for injuries to persons or damages to property, which may arise I
from or in connection with its performance under this Agreement. I
A. Minimum Scooe of Insurance I
I
Coverage shall be at least as broad as: I
1. Insurance Services Office ("ISO) Commercial General Liability Coverage
Form No. CG 20 10 10 01 and Commercial General Liability Coverage — I
Completed Operations Form No. CG 20 37 10 01. I
2. ISO Form No. CA 0001 (Ed. 1/87) covering Automobile Liability, Code 1 �
"any auto" or Code 8, 9 if no owned autos and endorsement CA 0025.
3. Worker's Compensation Insurance as required by the Labor Code of the
State of California and Employers Liability Insurance.
4. Errors and Omissions liability insurance appropriate to the consultanYs
profession. Architects' and engineers' coverage is to be endorsed to
include contractual liability.
B. Minimum Limits of Insurance
Consultant shall maintain limits no less than:
1. General Liabilitv: $1,000,000 combined single limit per occurrence for I
bodily injury, personal injury and property damage including operations,
products and completed operations. If Commercial General Liability I
Insurance or other form with a general aggregate limit is used, the I
general aggregate limit shall apply separately to the work performed i
under this Agreement, or the aggregate limit shall be twice the prescribed '
per occurrence limit. '
2. Automobile Liabilitv: $1,000,000 combined single limit per accident for
bodily injury and property damage.
9d PmIS�aAgreemen4\on'mMr?0.^_(Nltl
P,\GE J OF"1 �
, I
CONTRACT #1314214
3. Worker's Compensation and Em�lovers Liabilitv: Worker's compensation
limits as required by the Labor Code of the State of California and
Employers Liability limits of$1,000,000 per accident.
4. Errors and Omissions liabilitv: $�,000,000 per occurrence.
C. Deductibles and Self-Insured Retentions
Any deductibles or self-insured retentions must be declared to and approved by
the City. At the option of the City, either the insurer shall reduce or eliminate
such deductibles or self-insured retentions as respects to the City, its officers, I
officials, employees and volunteers; or the Consultant shall procure a bond !
guaranteeing payment of losses and related investigations, claim administration
and defense expenses.
D. Other Insurance Provisions
The policies are to contain, or be endorsed to contain, the following provisions: I
1. General Liabilitv and Automobile Liabilitv Coverapes
a. The City, it officers, officials, employees and volunteers are to be
covered as additional insureds as respects; liability arising out of
activities performed by or on behalf of the Consultant, products
and completed operations of the Consultant, premises owned,
occupied or used by the Consultant, or automobiles owned, hired
or borrowed by the Consultant for the full period of time allowed by
law, surviving the termination of this Agreement. The coverage
shall contain no special limitations on the scope-of-protection
afforded to the City, its officers, officials, employees or volunteers.
b. The ConsultanYs insurance coverage shall be primary insurance
as respects to the City, its officers, officials, employees and
volunteers. Any insurance or self-insurance maintained by the ,
City, its officers, officials, employees or volunteers shall be in
excess of the ConsultanYs insurance and shall not contribute with
it.
c. Any failure to comply with reporting provisions of the policies shall
not affect coverage provided to the City, its officers, officials,
employees or volunteers.
d. The ConsultanYs insurance shall apply separately to each insured
against whom claim is made or suit is brought, except with respect
to the limits of the insurer's liability.
2. Worker's Compensation and Emolovers Liabilitv Coveraqe
The insurer shall agree to waive all rights of subrogation against the City,
i its officers, officials, employees and volunteers for losses arising from
w rk ursuant to this A reement.
I ConsultanYs pertormance of the o , p g
,
smi Prors.T.narcemcni.�ovcmee.zn.zuun �
rncn a oF v
' —_ _— — _ _ _ _ _ — _
CONTRACT #1314214 I
I 3. Professional Liabilitv Coverape I
If written on a claims-made basis the retroactivit date shall be the
, Y
effective date of this Agreement. The policy period shall extend from
August 1, 2014 to July 30, 2015. I
4. All Coveraqes li
Each Insurance policy required by this clause shall be endorsed to state
that coverage shall not be suspended, voided, canceled by either party,
reduced in coverage or in limits except after thirty (30) days prior written
notice by certified mail, return receipt requested, has been given to the
City.
E. Acceotabilitv of Insurers
Insurance is to be placed with admitted California insurers with an A.M. BesYs
rating of no less than A- for financial strength, AA for long-term credit rating and
AMB-1 for short-term credit rating. I
F. Verification of Coverape I
Consultant shall furnish the City with Certificates of insurance and with original
Endorsements effecting coverage required by this Agreement. The Certificates
and Endorsements for each insurance policy are to be signed by a person
authorized by that insurer to bind coverage on its behalf. The Certificates and
Endorsements are to be on forms provided or approved by the City. Where by
statute, the City's Workers' Compensation - related forms cannot be used,
equivalent forms approved by the Insurance Commissioner are to be substituted.
All Certificates and Endorsements are to be received and approved by the City
before Consultant begins the work of this Agreement. The City reserves the right
to require complete, certified copies of all required insurance policies, at any
time. If Consultant fails to provide the coverages required herein, the City shall
have the right, but not the obligation, to purchase any or all of them. In that
event, the cost of insurance becomes part of the compensation due the
contractor after notice to Consultant that City has paid the premium.
G. Subcontractors
Consultant shall include all subcontractors or sub-consultants as insured under
its policies or shall furnish separate certificates and endorsements for each sub-
contractor or sub-consultant. All coverage for sub-contractors or sub-consultants
shall be subject to all insurance requirements set forth in this Paragraph 6.1.
6.2 Indemnification. Notwithstanding the foregoing insurance requirements, and in addition
thereto, Consultant agrees, for the full period of time allowed by law, surviving the
termination of this Agreement, to indemnify the City for any claim, cost or liability that
' arises out of, or pertains to, or relates to any negligent act or omission or the willful
misconduct of Consultant in the performance of services under this contract by
Consultant, but this indemnity does not apply to liability for damages for death or bodily
injury to persons, injury to property, or other loss, arising from the sole negligence, willful i
misconduct or defects in design by the City, or arising from the active negligence of the
City.
se rN�s.c.,n�;«��nen�.Ho��.m5«'o,xanx
rnce s or�
i
CONTRACT #1314214
"Indemnify," as used herein includes the expenses of defending against a claim and the
payment of any settlement or judgment arising out of the claim. Defense costs include
all costs associated with defending the claim, including, but not limited to, the fees of
attorneys, investigators, consultants, experts and expert witnesses, and litigation
expenses.
References in this paragraph to City or Consultant, include their officers, employees,
agents, and subcontractors.
7.0 CONTRACT PROVISIONS
7.1 Ownership of Work. All documents furnished to Consultant by City and all documents or I
reports and supportive data prepared by Consultant under this Agreement are owned
and become the property of the City upon their creation and shall be given to City
immediately upon demand and at the completion of ConsultanYs services at no
additional cost to City. Deliverables are identified in the Scope-of-Work, Attachment "A".
All documents produced by Consultant shall be furnished to City in digital format and
hardcopy. Consultant shall produce the digital format, using software and media
approved by City.
7.2 Governinq Law. Consultant shall comply with the laws and regulations of the United
States, the State of California, and all local governments having jurisdiction over this
Agreement. The interpretation and enforcement of this Agreement shall be governed by
California law and any action arising under or in connection with this Agreement must be
filed in a Court of competent jurisdiction in Mendocino County.
7.3 Entire Aqreement. This Agreement plus its Attachment(s) and executed Amendments
set forth the entire understanding between the parties.
7.4 Severabilitv. If any term of this Agreement is held invalid by a court of competent
jurisdiction, the remainder of this Agreement shall remain in effect.
7.5 Modification. No modification of this Agreement is valid unless made with the agreement
of both parties in writing.
7.6 Assiqnment. ConsultanYs services are considered unique and personal. Consultant
shall not assign, transfer, or sub-contract its interest or obligation under all or any portion I
of this Agreement without City's prior written consent. i
7.7 Waiver. No waiver of a breach of any covenant, term, or condition of this Agreement I
shall be a waiver of any other or subsequent breach of the same or any other covenant,
term or condition or a waiver of the covenant, term or condition itself.
7.8 Termination. This Agreement may only be terminated by either party: 1) for breach of
the Agreement; 2) because funds are no longer available to pay Consultant for services
provided under this Agreement; or 3) City has abandoned and does not wish to complete
the project for which Consultant was retained. A party shall notify the other party of any
alleged breach of the Agreement and of the action required to cure the breach. If the �
breaching party fails to cure the breach within the time specified in the notice, the
contract shall be terminated as of that time. If terminated for lack of funds or I
abandonment of the project, the contract shall terminate on the date notice of
termination is given to Consultant. City shall pay the Consultant only for services
ti¢I I�miSVOAErmmm�b Navemher 3U,:UOb
rnr,e r or i
I — — _ �
. _
CONTRACT #1314214
performed and expenses incurred as of the effedive termination date In such event, as
a condit�on to payment. Consultant shall provide to City all finished or unfinished !
documents. data. studies. surveys, drawings, maps, models. photographs and reports I
prepared by the Consultant under this Agreement Consultant shall be entitled to
recerve �ust and equitable compensation for any work satisfactorily completed II
hereunder, subject to off-set for any direct or consequential damages Gty may mcur as i
a resull of ConsuHant's breach of contract i
7 9 Duphcate Onqinals This Agreement may be executed in duplicate onginals, each
bearing the onginal signature of the parties When so signed, each such document shall
be admissible in administrative or judiaal proceedmgs as proof oi the terms of the
Agreement between the parties
8 0 NOTICES
Any notice given under this Agreement shall be in wnting and deemed given when
personally delivered or deposrted in the mail �certified or registered) addressed to the
parties as follows
CITY OF UKIAH THE REED GROUP. INC
DEPT OF PUBLIC WORKS ROBERT REED
300 SEMINARY AVENUE 3053 FREEPORT BOULEVARD #158
UKIAH, CALIFORNIA 95482-5400 SACRAMENTO. CALIFORNIA 9561&4346
9 0 SIGNATURES ,
I
IN WITNESS WHEREOF, the parties have executed this Agreement the Effective Date
THE REED GROUP. INC
BY . .
Date
PRINT NAME
IRS IDN Number 'i
CITY OF UKIAH
i
BY _ '%L{ L��jiG YV�L w� �-lY �
Date
CITY MANAGER
ATTEST i
�
� �. �� n � �c ������ � ���- �iz� i ��� ,
CITY CLERK Date
, ;.���.,.��,:_ _..... ....... ..
I
�I
�
I
� CITY OF UKIAH PROPOSAL FOR WATER RATE STUDY i
I
ATTACHMENT "A"
PROPOSAL FOR WATER RATE STUDY
INTRODUCTION
This proposal to perform a waler rate study has been prepared by The Reed Group, Inc. for the
City of Ukiah (City) in response to a Requestfor Proposals (RFP) received February 25, 2014.
The objectives of the study are to:
• Propose fair and equitable water rates that reflect the cost of provicling service
• Develop,for immediate implementation, water shortage (drought) rate surcharges
• Review and update miscellaneous service fees
• Recommend reserve policies for operations,capital replacement, and emergencies
• Develop a 1Syear financial model for new demands and service requirements based on I
projected economic conditions. I
1'he Reed Group, Inc.believes that all rate studies have two dimensions, both of which deserve
equal attention. T'he first is the technical and Einancial analysis required. This includes
development of the financial plan leading to annual rate revenue requirements, cost of service
analyses, and water rate structure design. The second dimension involves the process by which
water rate recommendations are documented, explauied,justified, and ultimately accepted and
adopted. This process part of the study requires the rate consultant to:
• Identify and understand the issues and concems of elected officials, as well as the
general public,including issues around water shortage and drought rate surcharges
• Conduct the technical and financial analyses in a transparent manner that adequately
addresses these issues and concerns �
• Educate decision makers and the public regarding how the issues and concerns are
addressed and resolved, as well as other factors affec[ing costs, finances, and rate
decisions,and
• Develop consensus on and support for study recommendaHons.
'fhe approach to the water rate study will be consistettt with the firm's mission: To provide i
clients with an exceptional level of service and responsiveness, to develop creative yet practical ;
soluHons to client needs, and to broaden understanding and facilitate consensus on complex
issues. I am prepazed to begin this project immediately with the intent of having a final report
within 45 days of contract approval- 15 days sooner than requested in the RFP!
SECTION 'I —APPROACH TO THE PROJECT
The proposed approach and scope of work is consistent with conducting a comprehensive
water rate study. 71us includes developing a mulH-year financial plan, performing necessary
cost of service analyses, and designing water rates consistent with Proposition 218. 7'his study
THE REED GROUP,INC. PAGE 1
_- � -- - - --_ ..
I
CITY OF UKIAH PROPOSAL FOR WATER RATE STUDY
will also place special empl�asis on developnlg water shortage rates that can Ue iulplemented
unmediately (as well as avaIlable for[uture dry periods).
The proposed approach is consistent with the study requirements contained in the RFP, and
includes the followinp, tasks:
Task 1 -b�itiate Project and Review/Analyze Backgrouttd Information �
To facilitate completing the study well within the requested timeframe, upon notice of being
selected for the study (and prior to contract approval), a data and informaHon request will be
submitted to the City and a kick-off ineeting scheduled. (kice under contract the kick-off
meeting will be held to discuss key issues and any pressing concerns of the City (e.g., drought
situarion and public concerns). We will aLso discuss the water utility's current budget, existing
and/or anticipated debt obligations,capital program needs,current reserves,financial concerns,
water rate struchue and rate-setting objectives,and the City's expectations for the study.
The kick-off ineeting will also be used to review a detailed timeline for completing the study,
including specific milestone dates, as well as the ioles and responsibiliHes of both consultant
and staff.
Task 2-Develop Mulri-Year Financial Plan and Determine Annual Revenue Requirements
The financial plan is an annual cash-flow model. This differs from standard accounting income
statements. The financial plan will span a 15-yeax plazinulg period consistent with the City's
request. It will be based on the detailed accommt structure used in the City's budget and
financial acwunting system. Sepazate funds and reserves within the water utility will be
modeled.
Aiulual water rate revenue requirements are deteruiuted U�rough development of fl�e fnlazuial
plan model. The revenue requirement is based on annual operating and maintenance expenses,
debt service obli$ations, and contributions towards capital program activities with
consideration of non-rate revenues, financial reserves and reserve policies. The financial plan
will consider: �
• Current and estimated future operating and maintenance costs
• Estimated customer growth and changes in water demands, including the effects of
water conservation
• Assumprions for inflation and interest rates
• Need to fund long-term capital improvements and replacement oE hifrastructure
• Existing and potenrial future debt service obligations,including debt service covecage
• Esrimated non-rate revenues including new capacity charges and other sources.
This task will also include analyzing and developing recommendations related to the City's
financial reserves and reserve policies, including reserves for operations, capital replacement, j
and emergencies. I
Governaient Code Section 53756 (AB 3030 from 2008) allows the City to adopt a mechanism for
automatically adjusting water races for either inflation or for changes in wholesale water costs.
This mechanism can be adopted for up to five years. The development of the financial plan will
THE REED GROUP,INC. PAV E z
i - - - '
CITY OF UKIAH PROPOSAL FOR WATER RATE STUDY �
uiclude how these provisions could be ulcorporate3 u�to rate recommendations to cover a 5-
yeaz period.
Task 3-Perform Cost of Service Analysis and Design Water Rates
Water rates must meet the cost of service requirements embodied in Proposition 218 (Article
XIII D of the California Constiturion). This task will entail performing the cost of service
analysis to proporHonately allocate the annual water rate revenue requirement ro each customer
class based on customer account, water meter, and water usage characteristics. Recent court
decisions have raised the bar for justiEying water rates. Maintaining a relatively simple rate
structure,such as the City's cunent structure,cazi help reduce the risk of legal ehallenge. I
The City's current water rate structure indudes fixed monthly base chazges based on meter size
and a uniform water u$age rate. Significaz�t changes to the rate structures are not envisioned in
this study. However, adjustments to the rate structure may be suggested if they better mect
cost of service requirements, improve revenue stability, and/or better achieve rate-setting
objectives. Rate setting objectives may include administrative ease, customer nnderstanding
and acceptance,and conservaHon effecriveness.
If appropriate, water rate schedules will be developed to cover a period of up to seven years.
This task will also include the review and update of the water utility's miscellaneous service
fees.
Task 4-Develop Water Shortage Contingency Strafegy
With 2014 shaping up to be a dry year (on the heels of a very dry yeaz), this task will examine
1he financial implications of various potential stages of water shortage. This will include an I
assessment of the potentia] impact to both revenues and expenses of reduced water sales, as ,
well as the development of strategies to counter the effects of the financial deficits created at
vazious stages of shortage. Strategies will include consideration of(1)increased use of available
reserves, (2) potential deferral of capital projects,and (3)implementaHon of water shortage rates
(drought surcharges). A balanced approach can help mitigate adverse unpacts in any one area.
Tssk 5-Develoy Water Shortage Rntes
Water shortage rates may include tempora�y rate surcharges and/or excess use charges to (1)
provide increased incentives to customers for meeting water use reduction goals, and (2) help
offset the financial deficit created by reduced water sales. RecommendaHons will be developed
for each stage of potential water shortage, and will be expressed in a way that they could be
implemented whenever a shortage is declared (in 2014 and/or in future years). The results of
this and the prior task could be incorporated into the City's water shoitage contingency
planning.
Task 6- Update City Council on Interim Status and OLtain Input
Just two weeks following contract award the City Council will be updated on the staWs of Ute
project, and given an opparttuuty to provide ulput. This update, to Ue provided duru�g flieir
regular meeting, will indude a summary of the project scope and schedule, a summary of the
current financial condiHon of the water utiliry, key issues to be addressed, differences between
long-term and short-term (drought) analyses and issues, the approach to developing study
THE REED GROUP,INC. PACE 3 I
'
CITY OF UKIAH P20POSAL FOR WATER RATE STUDY
recommendations, and any initial oUservations. T11is will also be out first opporhulity to hear
the interests and concems of the City Council and public. Meeting with the City Council early
in the shxdy process provides an opportunity ro leam, first hand, the interests and concerns of
the City Conncil and community. It is also necessary for completion of the project within the
timeframe stated in the RFP.
Task 7-Review Preliminary Results with Staff
Once the work identified in Tasks 1 through 5 are nearly complere, a second meeting with staff
will be held to thoroughly review the financial plan, cost of service analyses, water rate
cal�vlaHons, and water shortage rate strategy. Source documents and underlying assumptions ,
will be identified, and preliminary recommendations presented. This will be the opportunity
for City staff to gain familiarity with the analyses, results, and recommendations. It will also '
serve as an opportunity to discuss how key issues are addressed and resolved.
Handout materials will be prepared for this meeting. It will be scheduled prior to prepazing the
Preliminary Report, although an outline of the report will be shared. That repart and
recommendations may be shaped,in pazt,by the discussion during this meeting.
Task 8-Prepare Preliminary Water Rate Study Repart
This task,will involve preparing the Preliminary Water Rate Study report proposing new water
rates, as well as water shortage rates. The report will fully document all work performed in a
transparent and understandable manner. It will include (1) the 15-year financial plan analysis,
(2) cost of service analyses, (3) water xate recommendations, (4) water shortage analysis and
rates recommendations,and (5)other issues addressed during the study.
The repart will describe any need for uicreased aiuival water rate revenues, the basis for the
water rates, and the reasons fox recommending any rate structure changes. lt will also explain
the reasons for and benefits of water shortage rates in addressing the financial needs of the
utility during water shortages.
.An electronic copy (PDF format) and fifteen boun3 copies of the Preliuiinary Report will be
provided to staff.
Task 9-Present Study Recommendarions in Council Workshop
A workshop (or study session) will be held with the City Council to present and describe the
analyses and recommendarions of the water rate study. The 60 to 90 minute workshop will
allow for a more detailed presentation, a less Eormal discussion, and greater dialogue than
avaIlable during a regular City Council meeting. It will be the opportunity to present and
discuss details of interest to CouncIl members, and provide deeper explanations of the water '
utility's current situation, financial needs, and the water rate recommendaaons. Special '
attention will be focused on water shortage conditions and the proposed financial strategy and I
water shortage rates recommended for dealing with these conditions.
A PowerPoint presentation will be prepared for the study session and submitted to the City
, prior to the meeting.
I
THE REED GROUP,INC. PnGE 4
I . _ _ _. - _ _ _- - _ -_. .. __ - .
I
I CITY OF UKIAH PROPOSAL FOR WATER RATE STUDY
i
Task 20- I'repare Final Water Rate Shuty Report
Once comments aze received on the Preliminary Report a b'inal Water Rate Study report will be
prepazed that reflects comments and d'uection from stafE, the City Council, and public. The
Final Report will provide the support and basis for proceeding with the ProposiHon 278 public
norice process and public hearing to adopt new water rates, as well as proposed water shortage
rates. An electronic copy (PDF format) and fifteen bound copies of the Final Report will be
provided m staff.
Task 11 - Present Study Recommendations in Regular Council Meetiug
The Final Report and study recommendations will be presented in one regulaz City Council I
meeting. This presentation will be more abbreviated than the workshop, and geared toward
summarizing recommendaHons for the benefit of the general public. The presentation will I
focus primarIly on water rate recommendations, the benefits to the City and customers, and the 'i
potential bill unpacts recommendaHons will have on various °typical" customers. The
presentation will also include comparing a typical single family water bill with those in
neighboring communities, as well as an assessment oE the impact of water shortage rates on �
rypical customers that achieve water use reducHon goals verses those that do not reduce use.
A PowerPoint presentarion will be prepazed for the CouncIl meeting and submitted to the City �
prior to the meeting. ,
Task 12-Assist in Drafting Proposition 218 Notice
I will assist City staff and legal counsel in draf[ing the required Norice of Public Hearing ui
compliance with Proposition 218 for flie adoption of new water rates. This notice ntust be
mailed to all affected customers/property owners at least 45 days prior to the rate hearin�. As
required by Proposifion 218, the notice will include the complete rate schedules, as well as the
basis and reasons for the rate changes. In addition, the notice will describe water shortage rates.
Task 13-Explain Rate Recommendntions nt n Communifiy Meeting
The RFP calls for a "public meeting inviting citizen input" on the drought rate structure. In our
view, it is not pracHcal to conduct this meeting within the 60 days allowed to develop the Final
Repoxt. In addition, it may be unwise to hold a community meeting prior to briefing Council
members on the water rate issues. For these reasons, it is proposed that during the 45-day
public notice period prior to the rate hearing, a community meeting be held co describe and
explain the proposed water rate recommendarions, includin� water shortage rates and the
impacts of the rates on customers. The workshop will Focus on aiding public undexstanding of
proposed water rates, and be an opportunity to answer questions and address concerns.
A PowerPoint presentation will be prepared for the community meeting and subuutted to the i
City prior to the meeting.
Task 14-Preseut Study AecommendaKons at Rate Hearing
I will present water rate recommendations during a City Council meeting and public hearing to I
adopt new rates. At the direction of the Mayor, I will also be available to answec questions
regarding the completed study and water rate recommendaHons.
THE RE&D GROUP INC. PAGE S
.
I
�
CITY OF UK1AH PROPOSAL FOR WATER RATE STUDY �'I
A PowerPovit presentation will be prepared for the rate hearnig and subautted to the City prior II
ro the meeting.
Task 15- Submit Water Rate Calcularion Modei to Cify Staff I
At the completion of the study an easy to use water rate calculation model (Excel file) will be
submitted to City staff for future use. T11e model will calculate fuhxre water rates, based on the
recommended water rate structure, based on inputs to indude annual revenue needs and basic
customer account and water usage data.
SECTION Y— EXPERIENCE
Bob Reed is President of TRGI. He brings nearly 30 years of experience as an engineer for a
major water/wastewater avency and as a management consultant to local governments. He has I
provided a diverse rutge of services to more than 75 dients. Approximately two-thirds of the I
engagements have been for clients for whom he hes provided mulHple services. Bob Reed
worked extensively with Karen Scalabrini on mulHple projects, when she was Finance Director '
for the City oI Sl. Helena. This existutg relationship could Ue valuable ut aid'ulg lhe completion I
of the project within the requesfed timeframe. In the past several years The Reed Group, Inc.
has performed similar studies for clients, as summarized in the tablc on the next page. Bob
Reed will be performing all work associated with this project. �
Bob Reed was previously licensed as a professional (civil) engineerulg ui Califomia, and holds li
BS and MS degrees in engineering and a MBA degree. He worked for several other consulting I
firms prior to establishing his own business in 1998. A full cesume has been omitted from this I
proposal for purposes of brevity.
SECTION 3 —QUALIFICATIONS AND REFERENCES ,
The Reed Group, Inc (TRGI) is a Sacramento-based management consulting firm specializing in I
water and wastewater rate, cost of service, and related financial plazuiuig services for local
govemments. The firm's mission is to provide clients with an exceptional level of service and
responsiveness, to develop creative yet practical solutions to clients needs, and to Uroaden I
understanding and facilitate consensus on complex issues. As such, I believe The Reed Group, i
Inc.is superbly qualified to offer services for municipal utilities in the following areas:
• Water,wastewater, and recycled rate studies
• Cost of service analyses
• Capacity charge nexus studies
• Long-razlge fu�azzcial and strategic plaiuiulg
• Public participation and tacilitation
• LirigaHon support I
Firm qualificatlons are summarized with the description of work performed for three clients.
I �
THE REED GROUP,INC. PAGE 6
�
I _- -- -� - - --- - - - - - -- � - -.. _ ._---- - -
i � C1TY OF UKIAH PROPOSAL FOR WATER RATE STUDY
The Reed Group, Inc.
Partial Listing of Water/Wastewater Clients
Utilit Rate and Fee Studles and Financial Plannin
a a�o`�`�,a4`° anoe �
c �
a� 0`0 J'��g �o�a�0 ��•'� � P�o
o°j Q`��m94`�`QPC���`eF00,o��as°GoFo \�yoQo�b
a� ¢ ,�c � eQ' ,� 4t a ¢e Q
a�0� �0�r��a��,5°�` °�J`Q�"4�ac4cQ69c�r��a�c�yJ
`O,Q.gm 0tg�1e0oti``�S�OC�m``�,y`�gr. �oti`1`\a `o'�O
Ciient s�a 3�'D�s�� �1`°�c+°�P9 P� O�s�° GaQ 5� �}`�
AmadorWaterAgency � .� '. � �:; : j ', i � ;��; ' ' . ; I
.__. .. .... .. .. . ... . ..._ .
Carmichael Water Dislrict
_........:-__...._._......................_.,......._..........� . _ . _ . .
City of Cloverdale .: ' u ` i �.-i � u � t' � �i �
i
......._�....._._:.........q....._...:�._._(._._._1....:....�........d......__�..._....:........_•.......
i ; i ? i I
City of Healdsburg �.: � ' ' i a i c , ,
,, ; :, ; , t� ; c� � ;
........i..:r.�..�....._..�.................:..............t...;.... . � . _ . ;.... ,
City of Lodi �'� � G � � ' ' :., ' . � ..�.�.... :
..: � � i. ICi � .., � ::ii , € r; �
�
..........................._...._..._. . ,___..._.......i..........;_. ........._....:...''....;....,.
: �
t"'-�-;
. .
City of Manteca �:: i ; � Ci : :� : �e �_� _ :__ G _ _
._.__,....._.»..........�..._._..:......__,..........:.
�.. .
_ ......_;.....,...c ..: .;.. ...«... ...
i . i
Millview County Wtr. Dist. €? ? � i o 1 c ! .. : � ! �'� ;
�
_._.._.�.........:...................i.........;..._....:......�_.: . _. _ .
Orangevale Mutual WC � � ' ° ' � .. ' � .
...
., t . U : n v ,.. . .- i , . .
., . . .: � .. . ,. . ...,... ..«......j
.........;...._.«.........:....::....;...._....:...._....:-..:-..._;.._ ... ....;.._...y.......; .
CityotPetaluma o ; �:� i � t� ' :'. ' . � � .'..�� . . � ��
, ... i i� i � '
......._,.__. r._..__._._._....._..._._.11...{_........:...._...i....:'._!..:.
, �._.._............... : : . : �
Quincy Comm.Serv. Dist. .a C �° ! ' " ' c ' n ' ' �' � ^ . _ . .
: �:�: .. '- r: : :
._.__..i._...........::....:......_;..._....i.....:._!....::-t...r._!._._.:......._:. ......
i
City of Rohnert Park � ` ` ` �` � � � '
� :.: : : ::: : :�: i
. . . , ... �_ . � �-�...
City of Roseville � ? ' "
._....... ., ... .. . . ... _ ,
Sacramento Suburban WD :: ; i : �.� ' ! r� ~ !> ; " ' �? +
. .... ......._,.._......._._.._..'.:'._.-'.._;_'_...'._'::'...�.........
........................,......;...
Cit of St. Helena '.^• ! i:� ; i �! � :' ! � � ' �' �
. r; s (i ; i,` I �
Y � . � . .:...t........._—i.__i._:i....i.__.....
,........�....................:.......... ...........
San Juan Water District :� � - - ' � e.� � - ' r;� �
� ,. .
,. : � .: [ '- � - � • r: a
�. .
._......;..........1........,.........y...::..;.,:''._.: "a: � .....}_._.._;..._...»......._�.....
:�. i �. I : .., ': .,� ; :...:.: � p i : ;; ;
City of Santa Rosa .: : . � �a : � � .....�..._.._q_...._.:.�`'...«. ....:.........
.........:..__. _ . . _
i T_._.....__-t--- --'� i . :
Solano Irtigation DisVict :i : ! ' '. ' c; � c; : �:1 I ,r, � r, ; � r�� ;
. . : .
_...__..._..._...........;__......._._._..:.__._.».._.._.{.._......�_....___..__}.___�.........
Tamatpais Comm.Serv. Dist � c's � ' i ,i; � !� : ; i:�� �
. i ? ;
..........�.......,_}..........:.................;......._,.........�.._...._,....._..;...._..:-........:..:.�....
�
City of West Sacramento ,_ ! i ; .� i � ' ' �: i ;
, � � ::
�
_....:.....................�_._...t_......_:................._........._.... .....:..._...;,......
Town ot Windsor �� � �'• � '� �' �"� ' �� ��� ` ��� '
San Juan Water District (1998 to present)
The Reed Group, Inc. performed a number of wholesale and retail water rate studies for the San I�
Juan Water District over a 15-year period. In early 2014, The Reed Group, Llc. performed a
water shortage financial analysis and developed a strategy to use a combination of drought
water rates (including watex shortage charges and excess use charges) and available reserves to
deal with the financial deficit created by the current drought. Recommendations were
presented to the Board of Directors within two weeks of uutiating the project. The Reed Group,
THE REED GROUP,INC. PAGE 7
� _- — — — --- — ...___ . --- - -- -
CITY OF UKIAH PROPOSAL FOR WATER RATE STUDY
uic. is now euiUarldng on an update to t11e DistricYs wholesale and retail multi-year fu�azicial
plan and water rate study.
T'he final report on drought water rates should be publidy available within a few days. A copy
will be e-maIled to the City as soon as it is made public.
Reference: Shauna Lorance,General Manager, (916)791-6936
Tozvn of Windsor (2006 to present)
In 2007, 2009, and 2012, The Reed Group, Inc. completed multi-year financial plans and rate
studies for the Town's water and water reclamation (wastewater) utIIities. The scope of these
projects was similar to the rate study requested by the City. The financial plan included
developing a financial strategy for the Town's capital improvement program, including long-
term debt, as well as detailed cost of service analyses and rate restructuring. Several
presentations were made to the Town Council in order to explain and address concerns
xegarding needed significant rate increases, as well as the rate restructuring, which was
intended to better achieve the Town's rate-setting objectives.
The final repart from the 2012 Water and Water Reclan�aHon Financial Plan and Rate Undate Sttrdy
can be found at httpJlca-windsor.civicplus.com/DocumentCenter/Home/View/13058.
A new water rate study,with considerarion of drought water rates, is currently underway. I
Reference: Richazd Burtt,Director of Public Woxks, (707)838-5343 �
Heather Ippoliri,Director of Admui.Services, (707) 838-5354
City of Henldsburg(2007 to 2013)
The Eirst project performed for the City of Healdsburg was wastewater rate study, which
uivolved developing a multi-year fulancial plan model and adjusting wastewater rates to meet
revenue needs. In 2012, a much more comprehensive study was performed that included
developing financial plan models for both the water and wastewater utilities, as well as
performing cost of service analyses and restructuring water and wastewater rates. It had been
many years since the City had completed comprehensive cost of service analyses for utiliry
rates, and the focus of this shtdy was on providing the required legal justificarion for the rates
(under Proposirion 218),as well as simplifyu�g the rate structures. i
The final report of the 2012 Water nnd Wastewater Financial Plans arid Rate Sh�d�can be found at
httn'//W WH' ci healdsburQ ca us/viodules/ShowDocument.aspx?documentid=9057.
In 2013, The Reed Group, Inc. completed a study to update the City's water and wastewater
capacity charges for new development. The shxdy involved using a system buy-in method for
determining the capacity charges. The study allowed the Ciry to reduce its capacity charges for
new development.
Reference: Marjie Pettus, City Manager, (707)431-3319
Heather Ippoliri,former Finance D'uector
Currently the Director of Admin.Services for Town of Windsor, (70�838-5354 �
THE REED GROUP,INC. PAGE 8
I
i - - - J
CITY OF UKIAH PROPOSAL FOR WATER RATE STUUY
I
SECTION 4—PROJECT SCHEDULE
The City's RFP states diat a Final Report will be due 60 days from contract awazd. The schedule
outlined below has the Final Report submitted in 45 days. This is an ambiHous schedule,
pazticularly because of the required meetings. However, it is achievable with the concerted
effort of both consultant and Ciry staff. Wliile the details of a project schedule wIll be discussed
with staff during Ehe projecf's kick-off ineeting, an estimated fimeline for project milestones is I
presented below. T'his timeline assumes the City CouncIl awards a contract during their Apri12 i
regulaz meeting. To help meet the timeline, once we have been notified of our selection (and
prior to Council approval), a data and informarion request will be submitted to the City and a
kick-off ineeting scheduled.
• City Council awards contract Apri12
• Hold kick-off ineeting Apri17
• Perform financial and rate analyses Apri12- 24
• Update City Council on interim status and obtain input April 16
• Review prelim.inary results wi[h staff Apri125
• Submit Prelimuiary� Report May 2
• Conduct workshop with City CouncIl May 71
• Submit Final Report May 16
• Present rate recommendations in regular CouncIl meeting May 21
• City mails Proposirion 218 notice to customers/propeity owners By May 31
• Hold comumnity meetirtg on water rate proposal Jiule 232
• City Council conducts water rate public hearing July 16
The Reed Group, Inc. will rely on City staff to schedule and coordinate meetings with the City
CouncIl and the community, as well as to print and mail the NoHce of Public Hearing.
The Reed Group, Inc. takes pride m its ability to shift efforts to accommodate the needs of
c]ients. Qften times,changes in the study can be made without changing tlae ovexall Umeframe
or cost of the project. In any event, you can be assured that The Reed Group, inc. will work
closely with the City to meet your expectaHons for the timely compleHon of the project. I
SECTION 5—EXCEPTIONS
There are no exceptions with regazd to fhe requested scope of services. I have reviewed your
Professional Consulting Services Agreement, and agree with the terms therein, with one
exception. As owner, officer, and only employee of The Reed Group, Inc., I am not required to
carry,nor do I cariy,workers compensation insurance or employer's liability insurance. I
� This workshop might occur prior to the start of the regular Council meeting,or on another day in this '
week.
� This community meetlng could be held at on any convenient day and tlme within the 45-day period
prior to the public hearing.
D ROUP INC. PAGE 9
THE REF, G ,