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HomeMy WebLinkAboutHildebrand Consulting 2019-01-16COU No. 1819153 AGREEMENT FOR PROFESSIONAL CONSULTING SERVICES This Agreement, made and entered in Ukiah, California, this 16th day of January, 2019 ("Effective Date"), by and between the CITY OF UKIAH, CALIFORNIA, hereinafter referred to as "City" jointly with the Ukiah Valley Sanitation District, hereinafter referred to as "UVSD" and Hildebrand Consulting, 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: and 11VS1 a. City requires consulting services related to conducting a sewer rate study, to develop potential sewer rates for City and UVSD. The study will be conducted in collaboration with The Reed Group, Inc. b. Consultant represents that it has the qualifications, skills, experience and is properly licensed to provide these services, and is willing to provide them according to the terms of this Agreement. c. City, UVSD 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, UVSD and Consultant. The written Agreement shall be in the form of an Amendment to this Agreement. 3.0 CONDUCT OF WORK (to IA UV 6 3.1 Time of Completion. Consultant shall commence performance of sices as required by the Scope -of -Work upon receipt of a Notice to Proceed from City/and shall complete such services within seven months from receipt of the Notice to Proceed. Consultant shall complete the work to the reasonable satisfaction of City and UVSD, 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 $81,210. Labor charges shall be Hildebrand - Joint Sewer Rate Study PAGE I OF 8 COU No. 1819153 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 •87 /i 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. and L4uSD 4.3 Sub -contractor Payment. The use of sub -consultants or other ervices 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, and i,uUsc which amounts shall be due and payable thirty (30) days after receipt by City 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 .Cit to determine progress made and to support the expenses claimed. 'c uvs0 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. ' D r 1k V,b s o v LW 3.b 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. Citylshall 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/nave �een�rs� 4�Y'" 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 or UVSD. 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 UVSD and their officers, agents and employees harmless from and against any claims or demands by federal, state or local government agencies for any Hildebrand - Joint Sewer Rate Study PAGE 2 OF 8 COU No. 1819153 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. 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 and UVSD. 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 and UVSD Manager determines that the Consultant has a disclosure obligation under the City's or UVSD'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 or UVSD's 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: 1. 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. Hildebrand - Joint Sewer Rate Study PAGE 3 OF 8 COU No. 1819153 2. Automobile Liability: $1,000,000 combined single limit per accident for bodily injury and property damage. 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 and uV b aid S An deductibles or self-insured retentidns 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: 1. General Liability and Automobile Liability Coverages a. The City and UVSD, their 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 and UVSD, and their officers, officials, employees or volunteers. b. ©K uvs_b Hildebrand - Joint Sewer Rate Study PAGE 4 OF 8 The Consultant's insurance coverage shall be primary insurance as respects to the City and UVSD, and their officers, officials, employees and volunteers. Any insurance or self-insurance maintainey 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 and UVSD, and their officers, officials, employees or volunteers. d. The Consultants 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. COU No. 1819153 2. Worker's Compensation and Employers Liability Coverage The insurer shall agree to waive all rights of subrogation against the City and UVSD, and their officers, officials, employees and volunteers for losses arising from Consultant's performance of the work, pursuant to this Agreement. 3. 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 from to 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 and UVSD. 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 and UVSD 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 and UVSD. Where by statute, the City's Workers' Compensation - related forms cannot be used, equivalent forms approved by the Insurance Commissioner are d litY I �S 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 and UVSD 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 and UVSD 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 and UVSD 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. Hildebrand . Joint Sewer Rate Study PAGE 5 OF 8 COU No. 1819153 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 CityVfor 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 UVSD, or arising from the active negligence of the City or UVSD. "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, UVSD or Consultant, include their officers, employees, agents, and subcontractors. 7.0 CONTRACT PROVISIONS and 7.1 Ownership of Work. All documents furnished to Consultant by City or UVSD and all documents or reports and supportive data prepared by Consultant under this Agreement are owned and become the jointly owned property of the City and UVSD upon their creation and shall be given to City or UVSD immediately upon demand and at the �� MSC completion of Consultant's services at no additional cost to City, a iverables are identified in the Scope -of -Work, Attachment "A". All documents produced by Consultant shall be furnished to City and UVSD in digital format and hardcopy. Consultant shall A — produce the digital format, using software and media approved by City and UVSD. 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 7.4 7.5 7.6 an6 (»6D77 6111 Entire Agreement. This Agreement plus its Attachment(s) and executed Amendments set forth the entire understanding between the parties. 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. Modification. No modification of this Agreement is valid unless made with the agreement of both parties in writing. 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'sjprior written consent. 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. Hildebrand - Joint Sewer Rate Study PAGE 6 OF 8 COU No. 1819153 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 and UVSD 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 and UVSD shall pay the Consultant only for services performed and expenses incurred as of the effective termination date. In such event, as a condition to payment, Consultant shall provide to City and UVSD 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 and UVSD 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. 7.10 Coordination Between City and UVSD. To facilitate the timely performance of Consultant's services, in addition to the specific provisions in Attachment A, City staff and UVSD staff shall coordinate communication with Consultant to provide a single point of contact for Consultant in connection with general administration of the contract. 1,01111 I n e61C1/1 a6eincy 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 UVSD ID15+1- (�- �Cinai l-IiDEBRAND CONSULTING, LLC DEPT. OF WATER RESOURCES MART nEMEi ENAE E MARK HILDEBRAND 300 SEMINARY AVENUE 151 LAWS AVENUE 3378 GUIDO STREET UKIAH, CALIFORNIA 95482 UKIAH, CALIFORNIA 95482 OAKLAND, CALIFORNIA 94602 9.0 SIGNATURES IN WITNESS WHEREOF, the parties have executed this Agreement the Effective Date: HILDEBRAND CONSULTING, LLC BY: PRINT NAME: 82-5365064 Mark Hildebrand IRS IDN Number Hildebrand - Joint Sewer Rate Study PAGE 7 OF 8 January 17, 2019 Date CITY OF UKIAH BY: G ' NGIACOMO ITY M NAGER UKIAH VALLEY SANITATION DISTRICT BY: (' 1,1r., x-e%h 11 `11�ei-(set a -MANAGE-R_ n1CtV€ i vii Chetir COU No. 1819153 Date ATTEST -fry 4 h1 "di wt4 r OnAt.Lativ CITY CLERK Hildebrand - Joint Sewer Rate Study PAGE 8 OF 8 Date ATTACHMENT A HILDEBRAND CONSULTING December 3, 2018 Sean White City of Ukiah 300 Seminary Avenue Ukiah, CA 95482 Mark DeMeulenaere Ukiah Valley Sanitation District 151 Laws Avenue, #B Ukiah, CA. 95482 Subject: Proposal for Joint Sewer Rate Study Dear Mr. White and Mr. DeMeulenaere, In response to your request, Hildebrand Consulting, in collaboration with The Reed Group, Inc., is pleased to submit this scope of work to conduct a sewer rate study. The study is intended to develop potential sewer rates that would apply under the new Operating Agreement between the City of Ukiah (City) and the Ukiah Valley Sanitation District (District). This proposal has been prepared based on our recent telephone conversation and our understanding of your needs at the present time. The City and District recently entered into a new Operating Agreement under which the sewer collection and treatment services will be provided within the respective service areas and costs will be fairly shared and distributed. The purpose of the "joint" sewer rate study is to develop new sewer rates schedules for both the City and the District, which will be based on a consistent methodology and approach that is aligned with the new Operating Agreement. The study will be performed with input from both the City and District, including direction from the City Council and District Board provided during joint meetings of the two bodies. Scope of Services To conduct the joint sewer rate study the following tasks will be performed. The scope of services includes preparing financial plan models that cover a planning period consistent with capital improvement plans and developing rate plans for each scenario. The rate plan will include rate schedules for up to five years. Specific tasks to be performed include the following: 1. Initiate Study, Obtain Data, and Develop Project Understanding - This task involves obtaining and reviewing the documents and information needed to fully understand the current organizational and operational setting from which we can develop financial plans and perform sewer rate analyses. Once under contract, we will submit a data request memorandum and allow for time to receive and review the data. Subsequently we will conduct a kick-off meeting via conference call with appropriate staff. This will facilitate our understanding of the current organizational and operational setting, the new operating agreement between the City and the District, governance issues, and other HILDEBRAND CONSULTING DECEMBER 3, 2018 PAGE 2 matters that may impact the study. We will review any data and information provided prior to the kick-off meeting so the meeting is as productive as possible. At the end of the meeting, we will review the project scope, timeline, responsibilities, and key milestones. Our goal is to develop a clear and common understanding of the scenarios to be evaluated and what is to be accomplished during the study. 2. Develop Multi -Year Financial Plan Model - A 10 -year financial plan will be developed for the sewer system. The financial plan will consider operating and maintenance costs, debt service obligations, and capital improvement needs, as well as non -rate revenues and reserve policies. The plan (and our model) will clearly segregate cost responsibilities between the City and the District as described by the Operating Agreement. The model will also reflect separate City and District financial reserves. We understand that both agencies are working to restructure their respective financial structures in order to meet the requirements of the new Operating Agreement. The financial plan will cover a planning period consistent with your capital improvement plans (typically 5 or 10 years). The financial plans will reflect estimated operating and maintenance costs, debt service obligations, and capital improvement needs, and will be used to determine annual sewer rate revenue requirements. The models are designed to serve as a planning tool useful for evaluating various capital spending. The financial plan model will also reflect non -rate revenues as well as recommendations for financial reserve policies to help enhance overall financial and revenue stability. If warranted, the financial plan model can also be used to evaluate the potential for future debt issuance and the impact additional debt service costs might have on the sewer rates, as well as other issues relevant to the evaluation of consolidation. Prior to the Financial Plan Workshop (Task 3) we will hold a video conference call with staff to review the draft model and make adjustments as needed. 3. Conduct Financial Plan Workshop with Council/Board - Once preliminary financial plan results have been developed, we will prepare for and conduct a workshop with the Council and Board (joint meeting) to present findings and recommendations regarding the annual sewer rate revenue needs, as well as underlying information, assumptions, and alternative scenarios considered. This will be an opportunity to inform Council/ Board members on the operating and maintenance costs, debt obligations, and capital program needs, as well as reserve considerations in determining annual sewer rate revenue needs. We will also use the workshop as an opportunity to describe the cost of service and rate design steps of the study to follow. Our primary purpose in conducting the workshop will be to inform and engage the Council/Board, to provide an opportunity for input, and to lay the groundwork for next steps and recommendations to follow. 4. Perform Cost of Service Analysis and Calculate Sewer Rates - The rules governing the calculation of sewer rates are provided primarily through Article XIIID of the California Constitution (Proposition 218). In essence, sewer rates cannot exceed the costs of providing service and the rates must reflect a proportionate allocation of costs to each customer. The cost of service analysis begins with the annual sewer rate revenue Proposal for Joint Sewer Rate Study HILDEBRAND CONSULTING DECEMBER 3, 2018 PAGE 3 requirement identified through the financial planning process. The annual revenue requirement is then allocated to different customer classes based on capacity requirements and demand characteristics of each customer class. Analysis of the City's and District's customer base including number/type of accounts, estimated sewer flows based on winter water usage, and loading characteristics to be used in cost allocations. Our cost of service analysis and sewer rate calculations will apply the same methodology to determining both City and District rates. Even with a uniform analytical framework, cost and policy considerations may lead to different rate schedules for the two respective service areas. We will clearly show where elements of the rates are the same for both City and District, and where they differ. These issues will be discussed and evaluated as the study proceeds. Sewer rates will include fixed monthly service charges as well as usage rates. 5. Develop 5 -Year Sewer Rate Plans - This task involves preparing complete sewer rate schedules for both the City and the District covering a 5 -year period. Sewer rate schedules will be developed for each year of the planning period based on estimated revenue needs. We will work with staff to determine the preferred timing of annual rate adjustments. These typically occur at the beginning of each fiscal year or each calendar year, though other schedules are possible. To place proposed new rates into context, we will compare the typical residential sewer bills with bills under current sewer rate schedules, as well as with neighboring communities. 6. Bond Refunding Assistance - We understand that your financing team is working on the refunding of a bond. Given the financial and revenue analysis that is inherent to a sewer rate study, we will be in possession of financial numbers that may be beneficial to the bond refunding effort. We will coordinate with the financing team to provide numbers and support, as requested. 7. Prepare Draft Report - Once the financial plans have been prepared, and the cost of service and rate design steps completed, an administrative draft study report will be prepared and submitted to the City and the District. The report will document all information, assumption, analyses, findings, and recommendations from the study and provide the technical basis for proposed rates. We will review the administrative draft with staff, make any required refinements, and then prepare a draft report that can be presented to the Board/City Council. 8. Present Study Findings and Recommendations in Joint Meeting - Once Study recommendations will then be presented to the Boards of Directors and City Council during a joint meeting. 9. Finalize Report and Prepare Draft Proposition 218 Notice of Public Hearing - Following receipt of comments on rate recommendations from staff, the study report will be revised, as necessary, and submitted in final form. This task will also include preparing a draft Notice of Public Hearing regarding proposed sewer rates, in accordance with the requirements of Proposition 218. With each governing body's concurrence (and following legal review) the District and City would mail the notice to affected property owners at least 45 days prior to a public hearing. Our proposal assumes the District and Proposal for Joint Sewer Rate Study HILDEBRAND CONSULTING DECEMBER 3, 2018 PAGE 4 City will be responsible for finalizing, printing, and mailing the Notice of Public Hearing for their respective service areas. The final report should be available to any interested parties during the 45 days prior to the public hearing. 10. Present Recommendations During the Sewer Rate Public Hearing - Study recommendations will be presented to the Board/City Council during a public hearing to adopt new sewer rate plans. A single public hearing at a joint meeting are assumed for cost estimation purposes. 11. Conduct Extra Public Meetings (OPTIONAL TASK) - It may be desirable and advantageous to present study findings and recommendations in additional joint meetings and/or to conduct community meetings to share results with the public. Additional public meetings can be added at your request. Summary of Joint Council/Board Public Meetings: - Financial Planning Workshop - Presentation of Sewer Rate Study Recommendations - Public Hearing to Adopt New Sewer Rates As shown in our price proposal below, additional meetings (if needed) would each add about $3,660 to the project's cost. Project Schedule Our goal will be to develop a schedule that would allow for implementation of new sewer rates by the beginning of FY 19-20, which is consistent with the expectations under the Operating Agreement. That being said, we will not be able to start the financial planning component until the FY 18-19 budget has been recast to match the requirements of the Operating Agreement. This budget information is foundational to the study, therefore a delay in receiving that data could affect the project schedule. • Project approval and notice to proceed Mid -December • Obtain requested information and conduct kick-off meeting Mid -January • Prepare financial plan Early February* • Conduct financial plan workshop with Council/Board Mid -February • Perform cost of service analyses and calculate sewer rates Late February • Prepare draft report Early March • Present study findings to the Board / City Council Late March • Mail notice of public hearing Early April • Prepare final report Early April • Conduct sewer rate public hearing Late May • Implement new sewer rates July 1, 2019 Proposal for Joint Sewer Rate Study HILDEBRAND CONSULTING DECEMBER 3, 2018 PAGE 5 * Assuming that budget information is available in the new format by mid-January. Project Team This study will be led and managed by Mark Hildebrand of Hildebrand Consulting, LLC with close collaboration with Bob Reed of The Reed Group. We both bring extensive knowledge and experience to utility rate setting, as well as to organizational, operational, and strategic issues related to public utilities. This breadth of experience may be particularly valuable during this engagement. Mark Hildebrand, Hildebrand Consulting, LLC Mark is a finance and rate consultant with 17 years of experience who bridges the disciplines of financial analysis, business strategy, and organizational optimization. He has performed scores of water, wastewater, and recycled water rate studies for both large and small utilities. Mark is an expert in Proposition 218 and California's legal requirements regarding utility rate -setting. He has been published by the AWWA Journal for articles addressing the challenges of conservation pricing in California. Other expertise includes utility privatization, strategic business planning, business case evaluations, alternative project delivery (APD), organizational assessments, and change management. Bob Reed, The Reed Group, Inc. Bob brings over 30 years of combined experience both as an engineer for a major water/wastewater agency and as a consultant providing a broad range of financial, utility rate, and management consulting services to local governments in the areas of water and wastewater utility management, as well as public works and engineering functions. He has performed hundreds of studies covering a diverse range of utility rate/fee issues, capital improvement financial planning, resource management, and litigation support/ avoidance to more than 75 clients. Approximately two-thirds of the engagements have been for clients for whom he has provided multiple services; some for more than 15 years. Bob is dedicated to providing clients with an exceptional level of service and responsiveness, to developing creative yet practical solutions to client needs, and to broadening understanding and facilitating consensus on complex issues. Estimated Cost The estimated cost to complete the sewer rate study as described herein is $77,550. We do not charge for travel expenses. It is our practice to bill monthly for the actual time and expenses incurred, up to the contract limit. Payment is due within 30 days. Mark Hildebrand's hourly billing rate for 2019 is $210, and Bob Reed's rate is $285. These rates are subject to change each January. Proposal for Joint Sewer Rate Study HILDEBRAND CONSULTING DECEMBER 3, 2018 PAGE 6 Joint Sewer Rate Study Proposed Project Cost Consultant Hours Professional B Reed M Hildebrand Fees Task Hourly billing rates --> $285 $210 1 Initiate Study, Obtain Data, and Develop Project Understanding 20 28 $11,580 2 Develop Multi -Year Financial Plan 20 40 $14,100 3 Financial Plan Workshop with Council/Board (Prep and Meeting) 4 12 $3,660 4 Perform Cost of Service Analysis and Calculate Sewer Rates 24 36 $14,400 5 Develop 5 -Year Sewer Rate Plans 8 26 $7,740 6 Bond Refunding Assistance 2 6 $1,830 7 Prepare Admin. Draft and Draft Reports 16 40 $12,960 8 Present Findings and Recommendations During a Joint Meeting 12 20 $7,620 9 Finalize Report and Prepare Draft Proposition 218 Notice 4 16 $4,500 10 Present Recommendations During Sewer Rate Public Hearing 4 12 $3,660 Total: 110 220 $77,550 Extra Public Meetings 4 12 $3,660 Please let me know if you have any questions or comments regarding this proposal. We appreciate the opportunity to be of service to the districts during this period of organizational change. For your convenience and expediency in getting this project underway, a data and information request is attached to this letter. Additional information may be requested as the study progresses. Sincerely, Mark Hildebrand Hildebrand Consulting, LLC Robert Reed The Reed Group, Inc. Proposal for Joint Sewer Rate Study