HomeMy WebLinkAboutNHA Advisors, LLC 2016-09-02COU No. 1617119
AGREEMENT FOR
PROFESSIONAL CONSULTING SERVICES
This Agreement, made and entered into this 2nd day of September, 2016 ("Effective
Date"), by and between CITY OF UKIAH, CALIFORNIA, hereinafter referred to as "City" and
NHA Advisors, LLC, a limited liability company, organized and in good standing under the laws
of the state of California, hereinafter referred to as "Consultant".
RECITALS
This Agreement is predicated on the following facts:
a. City requires consulting services related to Wastewater Municipal Advisory Consulting
Services.
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.
City and Consultant agree upon the Scope -of -Work and Work Schedule attached hereto
as Attachment "A", 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").
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
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 until the project is complete. Consultant shall complete the work to the
City's reasonable satisfaction, even if contract disputes arise or Consultant contends it is
entitled to further compensation.
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 $8,000. 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 A,
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COU No. 1617119
which shall include 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 A. 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 Changes. 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 Payment. The use of sub -consultants or other services to perform a
portion of the work of this Agreement shall be approved by City prior to commencement
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 Payment. 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
and billed for. Invoices shall be accompanied by documentation sufficient to enable City
to determine progress made and to support the expenses claimed.
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 City's 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
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.
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COU No. 1617119
Consultant warrants and represents that it is a properly licensed professional or
professional organization with a substantial investment in its business and that it
maintains its own offices and staff which it will use in performing under this Agreement.
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 Liability. Without limiting Consultant's obligations arising under Paragraph 6.2
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
from or in connection with its performance under this Agreement.
A. Minimum Scope of Insurance
Coverage shall be at least as broad as:
1. Insurance Services Office ("ISO) Commercial General Liability Coverage
Form No. CG 20 10 10 01 and Commercial General Liability Coverage —
Completed Operations Form No. CG 20 37 10 01.
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 consultant's
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:
General Liability: $1,000,000 combined single limit per occurrence for
bodily injury, personal injury and property damage including operations,
products and completed operations. If Commercial General Liability
Insurance or other form with a general aggregate limit is used, the
general aggregate limit shall apply separately to the work performed
under this Agreement, or the aggregate limit shall be twice the prescribed
per occurrence limit.
Automobile Liability: $1,000,000 combined single limit per accident for
bodily injury and property damage.
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COU No. 1617119
3. Worker's Compensation and Employers Liability: 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 liability: $1,000,000 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,
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:
General Liability and Automobile Liability Coverages
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 Consultant's 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 Consultant's 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 Consultant's 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 Employers Liability Coverage
The insurer shall agree to waive all rights of subrogation against the City,
its officers, officials, employees and volunteers for losses arising from
Consultant's performance of the work, pursuant to this Agreement.
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COU No. 1617119
Professional Liability Coverage
If written on a claims -made basis, the retroactivity date shall be the
effective date of this Agreement. The policy period shall extend one year
from completion of work.
4. All Coverages
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. Acceptability of Insurers
Insurance is to be placed with admitted California insurers with an A.M. Best's
rating of no less than A- for financial strength, AA for long-term credit rating and
AMB -1 for short-term credit rating.
F. Verification of Coverage
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
misconduct or defects in design by the City, or arising from the active negligence of the
City.
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COU No. 1617119
"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
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 Consultant's 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 Governing 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 Agreement. This Agreement plus its Attachment(s) and executed Amendments
set forth the entire understanding between the parties.
7.4 Severability. 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 Assignment. Consultant's services are considered unique and personal. Consultant
shall not assign, transfer, or sub -contract its interest or obligation under all or any portion
of this Agreement without City's prior written consent.
7.7 Waiver. No waiver of a breach of any covenant, term, or condition of this Agreement
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
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
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COU No. 1617119
performed and expenses incurred as of the effective termination date. In such event, as
a condition to payment, Consultant shall provide to City all finished or unfinished
documents, data, studies, surveys, drawings, maps, models, photographs and reports
prepared by the Consultant under this Agreement. Consultant shall be entitled to
receive just and equitable compensation for any work satisfactorily completed
hereunder, subject to off -set for any direct or consequential damages City may incur as
a result of Consultant's breach of contract.
7.9 Execution of Agreement. This Agreement may be executed in duplicate originals, each
bearing the original signature of the parties. Alternatively, this Agreement may be
executed and delivered by facsimile or other electronic transmission, and in more than
one counterpart, each of which shall be deemed an original, and all of which together
shall constitute one and the same instrument. When executed using either alternative,
the executed agreement shall be deemed an original admissible as evidence in any
administrative or judicial proceeding to prove the terms and content of this Agreement.
8.0 NOTICES
Any notice given under this Agreement shall be in writing and deemed given when
personally delivered or deposited in the mail (certified or registered) addressed to the
parties as follows:
CITY OF UKIAH
DEPT. OF FINANCE
300 SEMINARY AVENUE
UKIAH, CALIFORNIA 95482-5400
9.0 SIGNATURES
NHA ADVISORS
ERIC SCRIVEN, PRINCIPAL
4040 CIVIC CENTER DRIVE, SUITE 200
SAN RAFAEL, CA 94903
IN WITNESS WHEREOF, the parties have executed this Agreement the Effective Date:
NHASO S
BY:
PRINT NAME: I L S SCrt�J
IRS IDN Number
CITY OF UKIAH
BY:
CYrY MANA R
ATTEST
CITY CLERK
Std - PmfSv Ag—.m November 20, 2008
PAGE 7 OF'.
Date
/�
Date '
Date
NHA;: ADVISORS
4040 Civic Center nrive, Suite 200 Office: 415.?35.2025
Sai i Rafael. CA 94903 www.NHAadvisors.com
August 15, 2016
Dan Buffalo
Finance Director
City of Ukiah
300 Seminary Avenue
Ukiah, CA 95482
RE: City of Ukiah Wastewater Municipal Advisory and Consulting Project
ATTACHMENT "A"
This letter specifies the terms of the engagement between NHA Advisors, LLC, located at 4040
Civic Center Drive, Suite 200, San Rafael, CA 94903 and City of Ukiah, located at 300 Seminary
Avenue, Ukiah, CA 95482.
This engagement between City of Ukiah and NHA Advisors, LLC shall become effective as of the
date of its acceptance as provided below.
Scope of Municipal Advisory Activities to be Performed
Services are detailed in Exhibit A, attached hereto.
Independent Registered Municipal Advisor ("IRMA")
If acting in the capacity of an Independent Registered Municipal Advisor ("IRMA") with regard
to the IRMA exemption of the SEC Rule, NHA Advisors, LLC will review all third party
recommendations submitted to NHA Advisors, LLC in writing by the City of Ukiah.
Term of Engagement Agreement
The commencement date of the agreement is August 15, 2016 and the end date is upon
completion of the Project. Any extensions must be mutually agreed upon by all parties in
writing.
Termination of Engagement Agreement
City of Ukiah may terminate at any time and without cause upon written notification to NHA
Advisors, LLC.
NHA Advisors, LLC may terminate upon 45 days' written notice to City of Ukiah and shall include
in such notice the reasons for termination.
City of Ukiah Wastewater Municipal Advisory and Consulting Project AUGUST 15 2016
In the event of termination, NHA Advisors, LLC shall be entitled to compensation for services
performed to the effective date of termination; City of Ukiah, however, may condition payment
of such compensation upon NHA Advisors, LLC delivering to City of Ukiah any or all documents,
photographs, computer software, video and audio tapes, and other materials provided to NHA
Advisors, LLC or prepared by or for NHA Advisors, LLC or the City of Ukiah in connection with
this Agreement.
Compensation and Out -of -Pocket Expenses
Compensation for the municipal advisory activities to be performed for this engagement is
provided in Exhibit B. attached hereto.
Fiduciary Duty
NHA Advisors, LLC is registered as a Municipal Advisor with the SEC and Municipal Securities
Rulemaking Board ("MSRB"). As such, NHA Advisors, LLC has a fiduciary duty to City of Ukiah
and must provide both a Duty of Care and a Duty of Loyalty that entails the following.
Duty of Care:
a) exercise due care in performing its municipal advisory activities;
b) possess the degree of knowledge and expertise needed to provide City of Ukiah with
informed advice;
c) make a reasonable inquiry as to the facts that are relevant to City of Ukiah's
determination as to whether to proceed with a course of action or that form the basis
for any advice provided to City of Ukiah; and
d) undertake a reasonable investigation to determine that NHA Advisors, LLC is not
forming any recommendation on materially inaccurate or incomplete information; NHA
Advisors, LLC must have a reasonable basis for:
L any advice provided to or on behalf of City of Ukiah;
ii. any representations made in a certificate that it signs that will be reasonably
foreseeably relied upon by City of Ukiah, any other party involved in the
municipal securities transaction or municipal financial product, or investors in
City of Ukiah securities; and
iii. any information provided to City of Ukiah or other parties involved in the
municipal securities transaction in connection with the preparation of an official
statement.
Duty of Loyalty:
NHA Advisors, LLC must deal honestly and with the utmost good faith with City of Ukiah and act
in City of Ukiah's best interests without regard to the financial or other interests of NHA
Advisors, LLC. NHA Advisors, LLC will eliminate or provide full and fair disclosure (included
NHA ADVISORS PAGE
City of Ukiah Wastewater Municipal Advisory and Consulting Project AUGUST 15 2016
herein) to Issuer about each material conflict of interest (as applicable). NHA Advisors, LLC will
not engage in municipal advisory activities with City of Ukiah as a municipal entity, if it cannot
manage or mitigate its conflicts in a manner that will permit it to act in City of Ukiah's best
interests.
Conflicts of interest and other Matters Requiring Disclosures
• As of the date of the Agreement, there are no actual or potential conflicts of interest
that NHA Advisors, LLC is aware of that might impair its ability to render unbiased and
competent advice or to fulfill its fiduciary duty. If NHA Advisors, LLC becomes aware of
any potential conflict of interest that arise after this disclosure, NHA Advisors, LLC will
disclose the detailed information in writing to City of Ukiah in a timely manner.
• The fee paid to NHA Advisors, LLC increases the cost of investment to City of Ukiah. The
increased cost occurs from compensating NHA Advisors, LLC for municipal advisory
services provided.
• NHA Advisors, LLC does not act as principal in any of the transaction(s) related to this
Agreement.
• During the term of the municipal advisory relationship, this agreement will be promptly
amended or supplemented to reflect any material changes in or additions to the terms
or information within this agreement and the revised writing will be promptly delivered
to City of Ukiah.
• NHA Advisors, LLC does not have any affiliate that provides any advice, service, or
product to or on behalf of the client that is directly or indirectly related to the municipal
advisory activities to be performed by NHA Advisors, LLC;
• NHA Advisors, LLC has not made any payments directly or indirectly to obtain or retain
the City of Ukiah's municipal advisory business;
• NHA Advisors, LLC has not received any payments from third parties to enlist [Firm
Name's] recommendation to City of Ukiah of its services, any municipal securities
transaction or any municipal finance product;
• NHA Advisors, LLC has not engaged in any fee -splitting arrangements involving NHA
Advisors, LLC and any provider of investments or services to City of Ukiah;
• NHA Advisors, LLC does not have any conflicts of interest from compensation for
municipal advisory activities to be performed, that is contingent on the size or closing of
any transactions as to which NHA Advisors, LLC is providing advice;
• NHA Advisors, LLC does not have any other engagements or relationships that might
impair NHA Advisors, LLC ability either to render unbiased and competent advice to or
on behalf of City of Ukiah or to fulfill its fiduciary duty to the City of Ukiah, as applicable;
and
• NHA Advisors, LLC does not have any legal or disciplinary event that is material to City of
Ukiah's evaluation of the municipal advisory or the integrity of its management or
advisory personnel.
NHA ADVISORS PAGE
City of Ukiah wastewater Municipal Advisory and Consulting Project AUGUST 15 2016
Legal Events and Disciplinary History
NHA Advisors, LLC does not have any legal events and disciplinary history on its Form MA and
Form MA -I, which includes information about any criminal actions, regulatory actions,
investigations, terminations, judgments, liens, civil judicial actions, customer complaints,
arbitrations and civil litigation. City of Ukiah may electronically access NHA Advisors, LLC's most
recent Form MA and each most recent Form MA -1 filed with the Commission at the following
website: www.sec.eov/edgar/searchedgar/companysearch html
There have been no material changes to a legal or disciplinary event disclosure on any Form MA
or Form MA -1 filed with the SEC.
Recommendations
If NHA Advisors, LLC makes a recommendation of a municipal securities transaction or
municipal financial product or if the review of a recommendation of another party is requested
in writing by City of Ukiah and is within the scope of the engagement, NHA Advisors, LLC will
determine, based on the information obtained through reasonable diligence of NHA Advisors,
LLC whether a municipal securities transaction or municipal financial product is suitable for City
of Ukiah. In addition, NHA Advisors, LLC will inform City of Ukiah of:
• the evaluation of the material risks, potential benefits, structure, and other
characteristics of the recommendation;
• the basis upon which NHA Advisors, LLC reasonably believes that the recommended
municipal securities transaction or municipal financial product is, or is not, suitable for
City of Ukiah; and
• whether NHA Advisors, LLC has investigated or considered other reasonably feasible
alternatives to the recommendation that might also or alternatively serve the City of
Ukiah objectives.
If City of Ukiah elects a course of action that is independent of or contrary to the advice
provided by NHA, NHA Advisors, LLC is not required on that basis to disengage from City of
Ukiah.
Record Retention
Effective July 1, 2014, pursuant to the Securities and Exchange Commission (SEC) record
retention regulations, NHA Advisors, LLC is required to maintain in writing, all communication
and created documents between NHA Advisors, LLC and City of Ukiah for 5 years.
NHA ADVISORS PAGE
City of Ukiah Wastewater Municipal Advisory and Consulting Project AUGUST 15, 2016
If there are any questions regarding the above, please do not hesitate to contact NHA Advisors,
LLC. If the foregoing terms meet with your approval, please indicate your acceptance by
executing both copies of this letter and returning one copy.
Sincerely,
NHA Advisors, LLC
By:
vv�
Principal
NHA ADVISORS PAGES
Exhibit A
City of Ukiah
Wastewater Enterprise — Municipal Advisory and Consulting Project
Objective Statement & Scope of Service
Objective: City is currently subject to a lawsuit from an adjacent special district with respect to
joint operations of a wastewater treatment plant. This litigation will jeopardize an already
committed source of low cost funding the City of Ukiah has secured to construct State of
California Department of Water Quality mandated improvements. Additionally, City of Ukiah
has existing wastewater system -related bonds outstanding which, absent current litigation, can
be refinanced to provide significant savings. Consultant will provide quantitative analysis that
will provide estimated, avoidable costs to the City of Ukiah wastewater ratepayers if the
litigation continues and the beneficial financing opportunities are lost.
Existing Conditions: City has secured 2 tranches of State Revolving Fund funding. Tranche 1
totals approximately $35.5 million and includes about $10 million of grant monies and $25.5
million of low cost loan. Terms of the loan are 1.00% for a 30 -year term. Tranche 2 totals
approximately $16 million and would include $6 million of grant monies and $11 million of low
cost loan (same terms). Tranche 2 is dependent upon City "taking down" Tranche 1.
Additionally, City has approximately $63 million of outstanding wastewater enterprise debt (the
"2005 Bonds"). Terms of this debt are rates ranging from 4.00-4.75%, 2036 final maturity and
annual, approximately level, payment of $4.86 million.
Scope of Service / Analysis: If litigation cannot be resolved, this will jeopardize and likely
eliminate opportunity to utilize already committed SRF monies for the mandated new
improvements, as well as taking advantage of the 2005 Bonds refinancing opportunity,
Therefore, Scenario A shall assume the following:
a. SRF loan commitment will be retracted and project funding will encompass just the the
cost to fund to upgrade the treatment plant to improve its treatment standard. The
system will continue to discharge into the Russian River. The cost of this project is
estimated at $25-30 million. Based upon litigation, an investment grade (i.e. 'BBB-" or
better) credit rating may not be possible. This may necessitate "alternative" sources of
financing such as a private placement or selling non -rated bonds in the public market.
Sourcing and structuring financing for such a loan may require additional time and, thus,
may necessitate a refreshing of the contracted price of the improvements, depending
upon the terms of the contractor's firm pricing guarantee.
b. 2005 Bonds may not have ability to be placed at rates that produce enough savings to
make a refinancing worthwhile and, therefore, current annual payment structure would
remain in place.
c. As noted above, the discharge will continue to flow to the Russian River in this Scenario.
This is not a permanent solution. Therefore, this Scenario A, shall also estimate the
future cost—estimated as the difference between today's current full project cost
(shown below in Scenario B) and the cost for just this interim solution in Scenario A.
This cost difference is estimated at $23-28 million and would be estimated to be
incurred in 5 years. This cost would be assumed to grow by CPI during this S -year period
and be funded using a similar method of finance as the earlier financing.
If litigation is resolved, Scenario B shall assume the following
a. Financial metrics of the wastewater utility credit would produce an "A" -category
rating and be a strong candidate for bond insurance. This credit category is assumed
and full credit analysis to verify this fact is beyond the scope of this analysis.
b. SRF loan commitment would remain in place and be utilized for both tranches of
funding
c. 2005 Bond refinancing would produce significant savings
Deliverable: Consultant shall provide a memorandum to City Staff outlining objective,
assumptions, methods and results of the foregoing Scenarios A and B options analyses, as well
as include a side by side comparison of same. Also, at option of City, Consultant may also
provide and present a power point presentation summarizing this memorandum to Staff and
City Council.
Exhibit B
City of Ukiah
Wastewater Enterprise— Municipal Advisory and Consulting Project
Compensation
Compensation Schedule: For work described within Exhibit Allocation
Hourly
A Scope of Services, Consultant will be compensated based ,
ate
on the hourly rate schedule shown to the right, but such Principal $275
compensation shall not exceed $7,500. Vice President $225
Associate $175
Out -of -Pocket- All expenses will be billed directly at cost to Analyst $125
the City. Expenses will be limited to typical expenses Administrative $75
necessary for completion of the services required, for
example typical charges will include copying, mailing, shipping, and data purchase (if not
provided by others). California travel will not be expensed for this Scope of Services. The
maximum expense total will not exceed $500. No reimbursable expense shall be incurred
without prior written approval of City.
CITY OF UKIAH
By:
Dan Buffalo, Finance Director
CONSULTANT (NHA ADVISORS LLC)
�s
By:
E'EOU J. Scriven, Principal