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HomeMy WebLinkAbout2011/12/06 Item 15ITY COUNCIL STATEMENT ~;,~ ClTY OF CHULA VISTA 12/6/11, Item ~J~ ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AWARDING A CONTRACT FOR THE DEVELOPMENT OF A FIVE-YEAR COST OF SERVICE AND RATE STUDY FOR SEWER S RVICES TO FINANCIAL CONSULTING SOLUTIONS GRO C. (FCS GROUP) SUBMITTED BY: DIRECTOR OF PUBLIC WORK \ ASSISTANT DIRECT R OF EN REVIEWED BY: CITY MANAGE ASSISTANT CITY ANAGER 4/STHS VOTE: YES ^ NO SUMMARY Staff recommends that a contract be awarded to Financial Consulting Solutions Group, Inc. (FCS Group) to develop aFive-Year Cost of Service and Rate Study for sewer services. The last rate study adopted by the City Council on Febniary 5, 2008 is due to expire on June 30, 2012. As a result it is necessary to conduct an update of the cost of service for the next five year cycle to ensure sufficient sewer funds are collected to maintain and operate the City's wastewater collection system. ENVIRONMENTAL REVIEW The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the proposed activity qualifies for a Class 6 categorical exemption pursuant to Section 15306 (Information Collection) of the State CEQA Guidelines because the proposal seeks to develop and prepare a Five-Year Cost of Service and Rate Study for Sewer Services leading to an action or actions that the City of Chula Vista has not yet approved, adop±ed, or funded. Thus, no further environmental review is necessary. RECOMMENDATION Council adopt the resolution. BOARDS/COMMISSION RECOMMENDATION Not applicable. 15-1 12/6/11, Item 1 ~ Page 2 of 4 DISCUSSION The City of Chula Vista is the sewer service provider to the residences and commercial enterprises in the City. Wastewater flows are ultimately conveyed to transmission and treatment facilities operated by the City of San Diego's Metropolitan Wastewater Department (METRO). On Febntary 5, 2008, the City Council, through Resolution 2008-043, adopted the first three years of the five-year rate plan (Fiscal Years 2008 to 2012) prepared by Camp Dresser & McKee, Inc. This action excluded the last two years of the rate plan due to unresolved issues, such as the potential upgrade of the Point Loma Wastewater Treatment Plant. On June 8, 2010, the City Council adopted Ordinance 3155 stating that sewer service rates for Fiscal Year 2010 would remain in effect until the City Council takes action to increase, or otherwise adjust the rates. Staff evaluated the sewer rates for Fiscal Years 2011 and 2012 and recommended no rate increases. As the study period of the 2008 rate plan will end in Fiscal Year 2012, it is necessary to prepare a new sewer rate case study to establish the rate structure for the next five years. One of the issues that could significantly affect the sewer rates for the City is the Point Loma Treatment Plant (PLTP) Secondary Waiver. In 2010, the City of San Diego was successful in obtaining afive-year waiver that allowed the continued operation of the PLTP at an advance primary level of sewer treatment before discharging into the ocean. If San Diego is not successful in obtaining another waiver in 2015, the sewer rates for the City of Chula Vista will increase significantly in order to pay for the upgrade to the PLTP to a secondary treatment level. If information is available, the rate case study will address any modifications to the sewer rates required as a result of the waiver issue. In addition, the study will bring forward a policy recommendation for a fund reserve to stabilize the fund and avoid spikes in rates caused by possible changes in expenditures. On July 22, 2011, a Request for Proposals (RFP) to develop aFive-Year Cost of Service and Rate Study for Sewer Services (Rate Study) was circulated with the following major tasks: 1. Financial Planning: Revenue requirements will be projected for afive-year period from Fiscal Year 2013 through Fiscal Year 2017. Financial planning involves estimation of annual O&M and capital expenditures, inter-fund transfers, annual reserve requirements, operating and capital revenues, and the determination of required annual sewer service revenues from rates and charges. 2. Cost of Service: The cost of service involves the apportioning of annual revenues required from rates to the different user classes in proportion to their demands on the sewer system. 3. Rate Design: Rate design involves the development of a fixed and variable schedule of sewer rates for each of the different user classes to reflect the required revenue adjustments made during the financial planning phase. 4. Reserve Levels: To determine the reserve levels needed to provide cash resources to reinvest in sewer infrastructure and to accommodate any natural variability in revenues and expenditures, including potential disruptions of cash flow. 15-2 12/6/11, Item ~S Page 3 of 4 Consultant Selection Process On August 26, 2011, the City Manager approved the formation of the selection committee for this project in accordance with Section 2.57 of the Chula Vista Municipal Code (see Attachment 1). the selection committee for this project was formed with the following members: City of Poway City of Chula Vista Kristen Crane, Utilities Administrator Iracsema Quilantan, Asst. Director of Engineering Tiffany Allen, Treasury Manager Roberto Yano, Senior Civil Engineer On August 18, 2011, the City received submittals from seven (7) firms qualified to perform the required tasks. The firms that submitted written proposals are (in alphabetical order): • Bartle Wells Associates • Capital Partnerships, Inc. • CDM • Financial Const~ting Solutions Group, Inc. (FCS Group) • NBS • PMC • RFC Raftelis Consultants, Inc. The selection committee reviewed and evaluated the submitted written proposals, and established a short list of four consultants who were invited to participate in the interview selection process. The written proposal evaluation was based on the following criteria: • Understanding of the work to be done • Quality of staff • Experience with similar kinds of work • Worlc distribution effort • Project approach for each objective The selection committee conducted interviews based on the following criteria: • Summary of project staffing level for wastewater financial services • Discussion of the project schedule and major task components and the critical path through substantial completion • Approach as it relates to the objectives of the Rate Study • Other relevant information 15-3 12/6/11, Item ~~ Page 4 of 4 The interviews were held on September 20, 2011. The results of the interview process are as follows: Firm Final Rank Cost Proposal Financial Consulting Solutions Group, Inc. (FCS 1 $71,549 Group) NBS 2 $80,000 RFC Raftelis Financial Consultants, Inc. 3 $64,766 Bartle Wells Associates 4 $64,000 After an in-depth review of the finalists, the selection committee concluded that FCS Group should be ranked as the number one negotiation preference. FCS Group has extensive local and regional experience in the preparation of rate studies completing over 2,000 studies and served more than 450 clients since the firm's inception in 1988. Currently, FCS Group is providing financial services for the City of Oceanside, City of Carlsbad, City of Del Mar, Orange County Sanitation District, City of Manhattan Beach, City of Riverside, Santa Margarita Water District, Santa Ana Watershed Project Authority, Western Riverside County Regional Wastewater Authority, City of Barstow and Lake Arrowhead Community Services District. The FCS Group's presentation and responses demonstrated that they have a strong understanding of wastewater financial issues in the City. Based on these findings, staff recommends that Council adopt the resolution awarding the contract to FCS Group. The negotiated contract price was set at $71,549. Staff allocated an additional $10,500 for contingencies. DECISION MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site specific and consequently the 500 foot rule found in California Code of Regulations section 18704.2(a)(1) is not applicable to this decision. CURRENT YEAR FISCAL IMPACT. Funding for this project has been approved as part of the Sewer Services Revenue fiord Fiscal Year 2012 budget with. no impact to the General Fund. ONGOING FISCAL IMPACT At the conclusion of the rate study, staff will notify Council of the results and identify, if any, on-going and/or future fiscal impacts at that time. ATTACHMENTS Attachment 1-Selection Committee memo Prepared by: Luis Pelayo, Associate Civil Engineer, Public Worlcs- Engineering J: IEngineerlAGENDAICAS2011 V2-06-11(Sewer Rate Study.doc 15-4 ~iTTAGI-~IVf~NT 1 MEMO Department of Public Works `~~ ~_ CITY OF CHULA VISTA File: 0790-8S-KY807 DATE: August 26, 2011 TO: Jim Sandoval, City Manager VIA: Scott Tulloch, Assistant Ciry Manager ~ ~ FROM: Richard Hopkins. • ector of Public Works Iracsema Quil ssistant Director of Engineering SUBJECT: Request for approval of a Selection Committee to evaluate qualifications and interview eligible consultants providing professional services for the preparation of the Five-Year Cost of Service and Rate Study for Sewer Services. The scope of this Request for Proposals (RFP) is to retain a consultant to prepare aFive-Year Cost of Service and Rate Study for Sewer Services that will: (1) evaluate the existing sewer rates, (2) establish" reserve levels, and {3) review and evaluate revenues and revenue requirements ensuring the financial stability of the sewer enterprise funds for the next five fscal years. Tius RFP will be issued on Friday, July 22, 2011 with a due date of Thursday, August 18, 2011. The responsive consultants will be screened and ranked based on criteria set forth in the RFP. Subsequently, the top three to five candidates will be interviewed and one consultant will be recommended by the Selection Committee to be awarded the project, which will then be brought forth to the City Council for approval. In accordance with Section 2.57 of the Chula Vista Municipal Code, we are requesting your approval to appoint the following people to fotn~ the subject committee that will be responsible to evaluate the qualifications and interview the successful respondents as necessary to select a qualified consultant: Iracsema Quilantan, Assistant Director of Engineering Tiffany Allen, Treasury Manager Roberto Yano, Senior Civil Engineer Kristen Crane, Utilities Administrator -City of Poway Please sign and return this sheet if you concur with the recommendation to appoint the above listed committee members. Thank you. Appr d• ~ ~~ ~-y" Sandoval, City Manager J:1EngineerlSEWERiSWdieslFee Rate Study12D11 Rate Study RFP1Rate Case RFD selection committee Memo2.doc 15-5 RESOLUTION NO. 2011- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AWARDING A CONTRACT FOR THE DEVELOPMENT OF A FIVE-YEAR COST OF SERVICE AND RATE STUDY FOR SEWER SERVICES TO FINANCIAL CONSULTING SOLUTIONS GROUP, INC. (FCS GROUP) WHEREAS, on February 5, 2008, the City Council through Resolution 2008-043 adopted the first three years of the five-year rate plan (Fiscal Years 2008 to 2012) prepared by Camp Dresser & McKee, Inc; and WHEREAS, as the study period of the five-year rate plan will end in Fiscal Year 2012, it is now necessary to prepare a study that will propose the sewer rates for the next five years ensuring the future adequacy of the sewer funds; and WHEREAS, on July 22, 2011, the City of Chula Vista's Engineering Division advertised the Request for Proposal (RFP) to provide consultant services necessary to prepare the Five-Year Cost of Service and Rate Study for Sewer Services; and WHEREAS, on August 18, 2011, the City of Chula Vista's Engineering Division received seven (7) proposals to provide consultant services for the preparation of the study; and WHEREAS, the Consultant selection process has been conducted in accordance with Section 2.56.110 of the Chula Vista Municipal Code; and WHEREAS, the selection panel has determined that Financial Consulting Solutions Group, Inc. ("Consultant") is the firm best qualified to undertake the services described in the proposed Agreement between Consultant and the City (the "Agreement"); and WHEREAS, Consultant warrants and represents that it is experienced and staffed in a manner such that it can prepare and deliver the services required of Consultant to City within the time frames provided in the Agreement and in accordance with the terms and conditions of the Agreement. 15-6 Resolution No. Page 2 NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista does hereby approve the Agreement with Financial Consulting Solutions Group, Inc. (FCS Group) for the preparation of a Five-Year Cost of Service and Rate Study for Sewer Services for the City of Chula Vista, a copy of which is on file in the Office of the City Clerk. Presented by Richard A. Hopkins Director of Public Works Approved as to form by r ~ ~~Zile '~R. Go gin ~~ity Attorney 15-7 THE ATTACHED AGREEMENT HAS BEEN REVIEWED AND APPROVED AS TO FORM BY THE CITY ATTORNEY'S OFFICE AND WILL BE FORMALLY SIGNED UPON APPROVAL BY THE CITY COUNCIL ~___- c G~, R. ' o 'ins rty Attorney Dated: I ~ 3 AGREEMENT BETWEEN THE CITY OF CHULA VISTA, AND FCS GROUP FOR DEVELOPING AFIVE-YEAR COST OF SERVICE AND RATE STUDY FOR SEWER SERVICES 15-8 Parties and Recital Page(s) Agreement between City of Chula Vista and Financial Consulting Solutions Group, Inc. for Developing aFive-Year Cost of Service and Rate Study for Sewer Services This agreement ("Agreement"), dated (date of Council a proval) for the purposes of reference only, and effective as of the date last executed unless another date is otherwise specified in Exhibit A, Paragraph 1, is between the City-related entity as is indicated on Exhibit A, Paragraph 2, as such ("City"), whose business form is set forth on Exhibit A, Paragraph 3, and the entity indicated on the attached Exhibit A, Paragraph 4, as Consultant, whose business form is set forth on Exhibit A, Paragraph 5, and whose place of business and telephone numbers are set forth on Exhibit A, Paragraph 6 ("Consultant"), and is made with reference to the following facts: Recitals WHEREAS, the Five-Year Cost of Service and Rate Study for Sewer Services (Rate Study) is needed to analyze the City's current sewer rate and perform a cost of service and rate analyses to ensure the financial stability of the sewer enterprise for the next five fiscal years, and; WHEREAS, the City requires that a consulting firm develop a Rate Study. The purpose of the Rate Study is to: 1) evaluate the existing sewer rates, 2) establish reserve levels, and 3) review and evaluate revenues and revenue requirements for the next five fiscal years, and; WHEREAS, on July 22, 2011, the City of Chula Vista's Engineering Division advertised the Request for Proposal (RFP) to provide consultant services necessary to prepare the Rate Study, and; WHEREAS, on August 18, 2011, the City of Chula Vista's Engineering Division received seven (7) proposals to provide consultant services for the preparation of the Rate Study, and; WHEREAS, the Consultant selection process has been conducted in accordance with Section 2.56.110 of the Chula Vista Municipal Code. The selection panel has determined that Consultant is the firm best qualified to undertake the services described in the Agreement; and, WHEREAS, Consultant warrants and represents that they are experienced and staffed in a manner such that they are and can prepare and deliver the services required of Consultant to City within the time frames herein provided all in accordance with the terms and conditions of this Agreement; (End of Recitals. Next Page starts Obligatory Provisions.) 15-9 P~~e 1 NOW, THEREFORE, BE IT RESOLVED that the City and Consultant do hereby mutually agree as follows: All of the Recitals above are hereby incorporated into this Agreement. A. General ARTICLE I. CONSULTANT'S OBLIGATIONS 1. General Duties. Consultant shall perform all of the services described on the attached Exhibit A, Paragraph 7, entitled "General Duties". 2. Scope of Work and Schedule. In the process of performing and delivering said "General Duties", Consultant shall also perform all of the services described in Exhibit A, Paragraph 8, entitled "Scope of Work and- Schedule", not inconsistent with the General Duties, according to, and within the time frames set forth in Exhibit A, Paragraph 8, and deliver to City such Deliverables as are identified in Exhibit A, Paragraph 8, within the time frames set forth therein, time being of the essence of this Agreement. The General Duties and the work and deliverables required in the Scope of Work and Schedule shall be herein referred to as the "Defined Services". Failure to complete the Defined Services by the times indie°a.ted does not, except at the option of the City, terminate this Agreement. i. Reductions in Scope of Work. City may independently, or upon request from Consultant, from time to time, reduce the Defined Services to be performed by the Consultant under this Agreement. Upon doing so, City and Consultant agree to meet in good faith and confer for the purpose of negotiating a corresponding reduction in the compensation associated with said reduction. ii. Additional Services. In addition to performing the Defined Services herein set forth, City may require Consultant to perform additional consulting services related to the Defined Services ("Additional Services"), and upon doing so in writing, if they are within the scope of services offered by Consultant, Consultant shall perform same on a time and materials basis at the rates set forth in the "Rate Schedule" in Exhibit A, Paragraph 10(C), unless a separate fixed fee is otherwise agreed upon. All compensation for Additional Services shall be paid monthly as billed. 3. Standard of Care. The Consultant expressly warrants that the work to be performed pursuant to this Agreement, whether Defined Services or Additional Services, shall be performed in accordance with the standard of care ordinarily exercised by members of the profession currently practicing under similar conditions and in similar locations. No Waiver of Standard of Care. Where approval by City is required, it is understood to be conceptual approval only and does not relieve the Consultant of responsibility for complying with all laws, codes, industry standards, and liability for damages caused by negligent acts, errors, omissions, noncompliance with industry standards, or the willful misconduct of the Consultant or its subcontractors. 1 5-1 0 Face ~ B. Application of Laws. Should a federal or state law pre-empt a local law, or regulation, the Consultant must comply with the federal or state law and implementing regulations. No provision of the Agreement requires the Consultant to observe or enforce compliance with any provision, perform any other act, or do any other thing in contravention of federal, state, territorial, or local law, regulation, or ordinance. If compliance with any provision of the Agreement violates or would require the Consultant to violate any law, the Consultant agrees to notify City immediately in writing. Should this occur, the City and the Consultant agree that they will make appropriate arrangements to proceed with or, if necessary, terminate the Project, or portions thereof, expeditiously. Subcontractors. Consultant agrees to take appropriate measures necessary to ensure that all Project participants, such as subcontractors, comply with all applicable laws, regulations, ordinances, and policies, whether federal, state, or local, affecting Project implementation. In addition, if a subcontractor is expected to fulfill any responsibilities of the Consultant under this Agreement, the Consultant shall assure that the subcontractor carries out the Consultant's responsibilities as set forth in this Agreement. C. Insurance General. Consultant must procure and maintain, during the period of performance of this Agreement„ and for twelve (12) months after completion, policies of insurance from insurance companies to protect against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work under the Agreement and the results of that work by the Consultant, his agents, representatives, employees or subcontractors and provide documentation of same prior to commencement of work. 2. Minimum Scope of Insurance. Coverage must be at least as broad as: CGL. Insurance Services Office Commercial General Liability coverage (occurrence Form CG0001). ii Auto. Insurance Services Office Form Number CA 0001 covering Automobile Liability, Code 1 (any auto). iii. WC. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. iv. E&O. Professional Liability or Errors & Omissions Liability insurance appropriate to the Consultant's profession. Architects' and Engineers' coverage is to be endorsed to include contractual liability. 3. Minimum Limits of Insurance. Contractor must maintain limits no less than those included in the table below: 15-1 1 Page 3 i. General Liability: $1,000,000 per occurrence for bodily injury, personal injury,. (Including (including death), and property damage. If Commercial General operations, Liability insurance with a general aggregate limit is used, either products and the general aggregate limit must apply separately to this completed project/location or the general aggregate limit must be twice the operations, as required occurrence limit. a plicable) ii. Automobile $1,000,000 per accident for bodily injury, including death, and Liability: property damage. iii. Workers' Statutory Compensation $1,000,000 each accident Employer's $1,000,000 disease-policy limit Liability: $1,000,000 disease-each em loyee iv. Professional $1,000,000 each occurrence Liability or Errors & Omissions Liability: 4. 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 will reduce or eliminate such deductibles or self-insured retentions as they pertain to the City, its officers, officials, employees and volunteers; or the Consultant will provide a financial guarantee satisfactory to the City guaranteeing payment of losses and related investigations, claim administration, and defense expenses. 5. Other Insurance Provisions. The general liability, automobile liability, and where appropriate, the worker's compensation policies are to contain, or be endorsed to contain, the following provisions: i. Aclclitional Insureds. City of Chula Vista, its officers, officials, employees, agents, and volunteers are to be named as additional insureds with respect all policies of insurance, including those with respect to liability arising out of automobiles owned, leased, hired or borrowed by or on behalf of the Consultant, where applicable, and, with respect to liability arising out of work or operations performed by or on behalf of the Consultant, including providing materials, parts or equipment furnished in connection with such work or operations. The general liability additional insured coverage must be provided in the form of an endorsement to the contractor's insurance using ISO CG 2010 (11/85) or its equivalent. Specifically, the endorsement must not exclude Products/Completed Operations coverage. ii. Primary Insurance. The Consultant's General Liability insurance coverage must be primary insurance as it pertains to the City, its officers, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers is wholly separate from the insurance of the contractor and in no way relieves the contractor from its responsibility to provide insurance. page 4 15-12 iii. Cancellation. The insurance policies required must be endorsed to state that coverage will not be canceled by either party, except after thirty (30) days' prior written notice to the City by certified mail, return receipt requested. The words "will endeavor" and "but failure to mail such notice shall impose no obligation or liability of any kind .upon the company, its agents, or representatives" shall be deleted from all certificates. iv. Active Negligence. Coverage shall not extend to any indemnity coverage for the active negligence of the additional insureds in any case where an agreement to indemnify the additional insured would be invalid under Subdivision (b) of Section 2782 of the Civil Code. v. Waiver of Subrogation. Consultant's insurer will provide a Waiver of Subrogation in favor of the City for each required policy providing coverage for the term required by this Agreement. 6. Claims Forms. If General Liability, Pollution and/or Asbestos Pollution Liability and/or Errors & Omissions coverage are written on a claims-made form: i. Retro Date. ~'he "Retro Date" must be shown, and must be before the date of the contract or the beginning of the contract work. ii. Maintenance and Evidence. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract work. iii. Cancellation. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a "Retro Date" prior to the contract effective date, the Consultant must purchase "extended reporting" coverage for a minimum of five (5) years after completion of contract work. iv. Copies. A copy of the claims reporting requirements must be submitted to the City for review. 7. Acceptability of Insurers. Insurance is to be placed with licensed insurers admitted to transact business in the State of California with a current A.M. Best's rating of no less than A V. If insurance is placed with a surplus lines insurer, insurer must be listed on the State of California List of Eligible Surplus Lines Insurers ("LESLI") with a current A.M. Best's rating of no less than A X. Exception may be made for the State Compensation Fund when not specifically rated. Pane J 15-13 `~ 8. Verification of Coverage. Consultant shall furnish the City with original certificates and amendatory endorsements affecting coverage required by Section C. The endorsements should be on insurance industry forms, provided those endorsements or policies conform to the contract requirements. All certificates and endorsements are to be received and approved by the City before work commences. The City reserves the right to require, at any time, complete, certified copies of all required insurance policies, including endorsements evidencing the coverage required by these specifications. 9. Subcontractors. Consultants must include all subconsultants as insureds under its policies or furnish separate certificates and endorsements for each subconsultant. All coverage for subconsultants is subject to all of the requirements included in these specifications. 10. Not a Limitation of Other Obli ations. Insurance provisions under this Article shall not be construed to limit the Consultant's obligations under this Agreement, including Indemnity. D. Security for Performance Performance Bond. In the event that Exhibit A, at Paragraph 18, indicates the need for Consultant to provide a Performance Bond (indicated by a check mark in the parenthetical space immediately preceding the subparagraph entitled "Performance Bond"), then Consultant shall provide to the City a performance bond in the form prescribed by the City and by such sureties which are authorized to transact such business in the State of California, listed as approved by the United States Department of Treasury Circular 570, http://www.fms.treas.gov/c570, and whose underwriting limitation is sufficient to issue bonds in the amount required by the agreement, and which also satisfy the requirements stated in Section 995.660 of the Code of Civil Procedure, except as provided otherwise by laws or regulations. All bonds signed by an agent must be accompanied by a certified copy of such agent's authority to act. Surety companies must be duly licensed or authorized in the jurisdiction in which the Project is located to issue bonds for the limits so required. Form must be satisfactory to the Risk Manager or City Attorney which amount is indicated in the space adjacent to the term, "Performance Bond", in said Exhibit A, Paragraph 18. 2. Letter of Credit. In the event that Exhibit A, at Paragraph 18, indicates the need for Consultant to provide a Letter of Credit (indicated by a check mark in the parenthetical space immediately preceding the subparagraph entitled "Letter of Credit"), then Consultant shall provide to the City an irrevocable letter of credit callable by the City at their unfettered discretion by submitting to the bank a letter, signed by the City Manager, stating that the Consultant is in breach of the terms of this Agreement. The letter of credit shall be issued by a bank, and be in a form and amount satisfactory to the Risk Manager or City Attorney which amount is indicated in the space adjacent to the term, "Letter of Credit", in said Exhibit A, Paragraph 18. 3. Other Security. In the event that Exhibit A, at Paragraph 18, indicates the need for Consultant to provide security other than a Performance Bond or a Letter of Credit (indicated by a check mark in the parenthetical space immediately preceding the Page 6 15-14 subparagraph entitled "Other Security"), then Consultant shall provide to the City such other security therein listed in a form and amount satisfactory to the Risk Manager or City Attorney. E. Business License. Consultant agrees to obtain a business license from the City and to otherwise comply with Title 5 of the Chula Vista Municipal Code. ARTICLE II. CITY OBLIGATIONS A. Consultation and Cooperation. City shall regularly consult the Consultant for the purpose of reviewing the progress of the Defined Services and Schedule therein contained, and to provide direction and guidance to achieve the objectives of this Agreement. The City shall permit access to its office facilities, files and records by Consultant throughout the term of the agreement. In addition thereto, City agrees to provide the information, data, items and materials set forth on Exhibit A, Paragraph 9, and with the further understanding that delay in the provision of these materials beyond thirty (30) days after authorization to proceed, shall constitute a basis for the justifiable delay in the Consultant's performance of this agreement. B. Compensation. .~ Followin Receipt of Billing. Upon receipt of a properly prepared billing from Consultant submitted to the City periodically as indicated in Exhibit A, Paragraph 17, but in no event more frequently than monthly, on the day of the period indicated in Exhibit A, Paragraph 17, City shall compensate Consultant for all services rendered by Consultant according to the terms and conditions set forth in Exhibit A, Paragraph 10, adjacent to the governing compensation relationship indicated by a "checkmark" next to the appropriate arrangement, subject to the requirements for retention set forth in Paragraph 18 of Exhibit A, and shall compensate Consultant for out of pocket expenses as provided in Exhibit A, Paragraph 11. 2. Supporting Information. Any billing submitted by Consultant shall contain sufficient information as to the propriety of the billing, including properly executed payrolls, time records, invoices, contracts, or vouchers describing in detail the nature of the charges to the Project in order to permit the City to evaluate that the amount due and payable thereunder is proper, and such billing shall specifically contain the City's account number indicated on Exhibit A, Paragraph 17(C) to be charged upon making such payment. 3. Exclusions. In determining the amount of the compensation City will exclude any cost 1} incurred prior to the effective date of this Agreement; 2) arising out of or related to the errors, omissions, negligence or acts of willful misconduct of the Consultant, its agents, employees, or subcontractors. i. Errors and Omissions. In the event that the City Administrator determines that the Consultants' negligence, errors, or omissions in the performance of work under this Agreement has resulted in expense to City greater than would have resulted if there were no such negligence, errors, omissions, Consultant shall reimburse City for any Page 7 15-15 additional expenses incurred by the City. Nothing herein is intended to limit City's rights under other provisions of this agreement. 4. Payment Not Final Ap rp oval. The Consultant understands and agrees that payment to the Consultant for any Project cost does not constitute a City final decision about whether that cost is allowable and eligible for payment under the Project and does not constitute a waiver of any violation of Consultant of the terms of the Agreement. The Consultant acknowledges that City will not make a final determination about the eligibility of any cost until the final payment has been made on the Project or the results of an audit of the Project requested by the City has been completed, whichever occurs latest. If City determines that the Consultant is not entitled to receive any portion of the compensation due or paid, City will notify the Consultant in writing, stating its reasons. The Consultant agrees that Project closeout will not alter the Consultant's responsibility to return any funds due City as a result of later refunds, corrections, or other similar transactions; nor will Project closeout alter the right of City to disallow costs and recover funds provided for the Project on the basis of a later audit or other review. i. Consultant's Obligation to Pay. Upon notification to the Consultant that specific amounts are owed to City, whether for excess payments or disallowed costs, the Consultant agrees to remit to City promptly the amounts owed, including applicable interest. ARTICLE III. ETHICS A. Financial Interests of Consultant Consultant is Desi~mated as an FPPC Filer. If Consultant is designated on Exhibit A, Paragraph 14, as an "FPPC filer", Consultant is deemed to be a "Consultant" for the purposes of the Political Reform Act conflict of interest and disclosure provisions, and shall report economic interests to the City Clerk on the required Statement of Economic Interests in such reporting categories as are specified in Paragraph 14 of Exhibit A, or if none are specified, then as determined by the City Attorney. 2. No Participation in Decision. Regardless of whether Consultant is designated as an FPPC Filer, Consultant shall not make, or participate in malting or in any way attempt to use Consultant's position to influence a governmental decision in which Consultant knows or has reason to know Consultant has a financial interest other than the compensation promised by this Agreement. Search to Determine Economic Interests. Regardless of whether Consultant is designated as an FPPC Filer, Consultant warrants and represents that Consultant has diligently conducted a search and inventory of Consultant's economic interests, as the term is used in the regulations promulgated by the Fair Political Practices Commission, and has determined that Consultant does not, to the best of Consultant's knowledge, have an economic interest which would conflict with Consultant's duties under this agreement. , 15-1 6 Page S 4. Promise Not to Acquire Conflicting Interests. Regardless of whether Consultant is designated as an FPPC Filer, Consultant further warrants and represents that Consultant will not acquire, obtain, or assume an economic interest during the term of this Agreement which would constitute a conflict of interest as prohibited by the Fair Political Practices Act. 5. Duty to Advise of Conflicting Interests. Regardless of whether Consultant is designated as an FPPC Filer, Consultant further warrants and represents that Consultant will immediately advise the City Attorney of City if Consultant learns of an economic interest of Consultant's that may result in a conflict of interest for the purpose of the Fair Political Practices Act, and regulations promulgated thereunder. 6. Specific Warranties Against Economic Interests. Consultant warrants, represents and agrees: i. That neither Consultant, nor Consultant's immediate family members, nor Consultant's employees or agents ("Consultant Associates") presently have any interest, directly or indirectly, whatsoever in any property which may be the subject matter of the Defined Services, or in any property within 2 radial miles from the exterior boundaries of any property which maybe the subject matter of the Defined Services, ("Prohibited Interest"), other than as listed in Exhibit A, Paragraph 14. ii. That no promise of future employment, remuneration, consideration, gratuity or other reward or gain has been made to Consultant or Consultant Associates in connection with Consultant's performance of this Agreement. Consultant promises to advise City of any such promise that maybe made during the Term of this Agreement, or for twelve months thereafter. iii. That Consultant Associates shall not acquire any such Prohibited Interest within the Term of this Agreement, or for twelve months after the expiration of this Agreement, except with the written permission of City. iv. That Consultant may not conduct or solicit any business for any party to this Agreement, or for any third party that maybe in conflict with Consultant's responsibilities under this Agreement, except with the written permission of City. IV. LIQUIDATED DAMAGES A. Application of Section. The provisions of this section apply if a Liquidated Damages Rate is provided in Exhibit A, Paragraph 13. Estimating Dama,g_es. It is acknowledged by both parties that time is of the essence in the completion of this Agreement. It is difficult to estimate the amount of damages resulting from delay in performance. The parties have used their judgment to arrive at a reasonable amount to compensate for delay. Page 9 15-17 2. Amount of Penalty. Failure to complete the Defined Services within the allotted time period specified in this Agreement shall result in the following penalty: For each consecutive calendar day in excess of the time specified for the completion of the respective work assignment or Deliverable, the Consultant shall pay to the City, or have withheld from monies due, the sum of Liquidated Damages Rate provided in Exhibit A, Paragraph 13 ("Liquidated Damages Rate"). Request for Extension of Time. If the performance of any act required of Consultant is directly prevented or delayed by reason of strikes, lockouts, labor disputes, unusual governmental delays, acts of God, fire, floods, epidemics, freight embargoes, or other causes beyond the reasonable control of the Consultant, as determined by the City, Consultant shall be excused from performing that act for the period of time equal to the period of time of the prevention or delay. In the event Consultant claims the existence of such a delay, the Consultant shall notify the City's Contract Administrator, or designee, in writing of that fact within ten (10) calendar days after the beginning of any such claimed delay. Extensions of time will not be granted for delays to minor portions of work unless it can be shown that such delays did or will delay the progress of the work. ARTICLE V. INDEMNIFICATION A. Defense, Indemnity, and Hold Harmless. 1. General Requirement. Except for liability for Professional Services covered under Article V, Section (A)(2), Consultant shall defend, indemnify, protect and hold harmless the City, its elected and appointed officers and employees, from and against any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions, negligence, or willful misconduct of Consultant, its officials, officers, employees, agents, and contractors, arising out of or in connection with the performance of the Defined Services or this Agreement. This indemnity provision does not include any claims, damages, liability, costs and expenses (including without limitations, attorneys fees) arising from the sole negligence or sole willful misconduct of the City, its officers, employees. Also covered is liability arising from, connected with, caused by or claimed to be caused by the active or passive negligent acts or omissions of the City, its agents, officers, or employees which may be in combination with the active or passive negligent acts or omissions of the Consultant, its employees, agents or officers, or any third party. 2. Professional Services. For those professionals who are required to be licensed by the state (e.g. architects, landscape architects, surveyors and engineers) ("Design Professionals"), Design Professionals shall defend, indemnify and hold the City, its officials, officers, employees, volunteers, and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or relating to any negligence, errors or omissions, recklessness, or willful misconduct of Design Professional, its officials, officers, employees, agents, consultants, and contractors arising out of or in connection with the performance of the Pane 10 15-18 `" Design Professional's Services. Also covered is liability arising from, connected with, caused by, or claimed to be caused by the active or passive negligent acts or omissions of the City, its agents, officers, or employees which maybe in combination with the active or passive negligent acts or omissions of the Design Professional, its employees, agents or officers, or any third party. The Design Professional's duty to indemnify, protect and hold harmless shall not include any claims or liabilities arising from the sole negligence or sole willful misconduct of the City, its agents, officers or employees. This section in no way alters, affects or modifies the Design Professional's obligation and duties under this Agreement. 3. Costs of Defense and Award. Included in the obligations in Sections 1 and 2, above, is the Consultant's obligation to defend, at Consultant's own cost, expense and risk, any and all aforesaid suits, actions or other legal proceedings of every kind that maybe brought or instituted against the City, its directors, officials, officers, employees, agents and/or volunteers. Consultant shall pay and satisfy any judgment, .award or decree that maybe rendered against City or its directors, officials, officers, employees, agents and/or volunteers, for any and all legal expense and cost incurred by each. of them in connection therewith. 4. Insurance Proceeds. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the City, its directors, officials, officers, employees, agents, and/or volunteers. Declarations. Consultant's obligations under Article V shall not be limited by any prior or subsequent declaration by the Consultant. 6. Enforcement Costs. Consultant agrees to pay any and all costs City incurs enforcing the indemnity and defense provisions set forth in Article V. 7. Survival. Consultant's obligations under Article V shall survive the termination of this Agreement. ARTICLE VI. TERMINATION OF AGREEMENT A. Termination for Cause. If, through any cause, Consultant shall fail to fulfill in a timely and proper manner Consultant's obligations under this Agreement, or if Consultant shall violate any of the covenants, agreements or stipulations of this Agreement, City shall have the right to terminate this Agreement by giving written notice to Consultant of such termination and specifying the effective date thereof at least five (5) days before the effective date of such termination. In that event, all finished or unfinished documents, data, studies, surveys, drawings, maps, reports and other materials prepared by Consultant shall, at the option of the City, become the property of the City, and Consultant shall be entitled to receive just and equitable compensation, in an amount not to exceed that payable under this Agreement and less any damages caused City by Consultant's breach, for any work satisfactorily completed on such documents and other materials up to the effective date of Notice of Termination,. Page 11 15-19 `~ B. Termination of Agreement for Convenience of City. City may terminate this Agreement at any time and for any reason, by giving specific written notice to Consultant of such termination and specifying the effective date thereof, at least thirty (30) days before the effective date of such termination. In that event, all finished and unfinished documents and other materials described hereinabove shall, at the option of the City, become City's sole and exclusive property. If the Agreement is terminated by City as provided in this paragraph, Consultant shall be entitled to receive just and equitable compensation, in an amount not to exceed that payable under this Agreement, for any satisfactory work completed on such documents and other materials to the effective date of such termination. Consultant hereby expressly waives any and all claims for damages or compensation arising under this Agreement except as set forth herein. ARTICLE VII. RECORD RETENTION AND ACCESS A. Record Retention. During the course of the Project and for three (3) years following completion, the Consultant agrees and to maintain, intact and readily accessible, all data, documents, reports, records, contracts, and supporting materials relating to the Project as City may require. B. Access to Records of Consultant and Subcontractors. The Consultant agrees to permit, and require its subcontractors to permit City or its authorized representatives, upon request, to inspect all Project work, materials, payrolls, and other data, and to audit the books, records, and accounts of the Contractor and its subcontractors pertaining to the Project. C. Project Closeout. The Consultant agrees that Project closeout does not alter the reporting and record retention requirements of this Agreement. ARTICLE VIII. PROJECT COMPLETION, AUDIT, AND CLOSEOUT A. Project Completion. Within ninety (90) calendar days following Project completion or termination by CITY, the Consultant agrees to submit a final certification of Project expenses and audit reports, as applicable. B. Audit of Consultants. The Consultant agrees to have performed financial and compliance audits the City may require. The Consultant also agrees to obtain any other audits required by City. The Consultant agrees that Project closeout will not alter the Consultant's audit responsibilities. Audit costs are allowable Project costs. C. Project Closeout. Project closeout occurs when City notifies the Consultant that City has closed the Project, and either forwards the final payment or acknowledges that the Consultant has remitted the proper refund. The Consultant agrees that Project closeout by City does not invalidate any continuing requirements imposed by the Agreement or any unmet requirements set forth in a written notification from City 15-20 Page 12 ARTICLE VIII. MISCELLANEOUS PROVISIONS A. Assignability. The services of Consultant are personal to the City, and Consultant shall not assign any interest in this Agreement, and shall not transfer any interest in the same (whether by assignment or notation), without prior written consent of City. Limited Consent. City hereby consents to the assignment of the portions of the Defined Services identified in Exhibit A, Paragraph 16 to the subconsultants identified thereat as "Permitted Subconsultants". B. Ownership, Publication, Reproduction and Use of Material. All reports, studies, information, data, statistics, forms, designs, plans, procedures, systems and any other materials or properties produced under this Agreement shall be the sole and exclusive property of City. No such materials or properties produced in whole or in part under this Agreement shall be subject to private use, copyrights or patent rights by Consultant in the United States or in any other country without the express written consent of City. City shall have unrestricted authority to publish, disclose (except as maybe limited by the provisions of the Public Records Act), distribute, and otherwise use, copyright or patent, in whole or in part, any such reports, studies, data, statistics, forms or other materials or properties produced Linder this Agreement. C. Independent Contractor. City is interested only in the results obtained and Consultant shall perform as an independent contractor with sole control of the manner and means of performing the services required under this Agreement. City maintains the right only to reject or accept Consultant's work products. Consultant and any of the Consultant's agents, employees or representatives are, for all purposes under this Agreement, independent contractors and shall not be deemed to be employees of City, and none of them shall be entitled to any benefits to which City employees are entitled including but not limited to, overtime, retirement benefits, worker's compensation benefits, injury leave or other leave benefits. Therefore, City will not withhold state or federal income_tax, social security tax or any other payroll tax, and Consultant shall be solely responsible for the payment of same and shall hold the City harmless with regard thereto. 1. Actions on Behalf of City. Except as City may specify in writing, Grantee shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever, as an agent or otherwise. Grantee shall have no authority, express or implied, to bind City or its members, agents, or employees, to any obligation whatsoever, unless expressly provided in this Agreement. 2. No Obligations to Third Parties. In connection with the Project, the Consultant agrees and shall require that it's agents, employees, subcontractors agree that the City shall not be responsible for any obligations or liabilities to any third party, including its agents, employees, subcontractors, or other person or entity that is not a party to this Agreement. Notwithstanding that the City may have concurred in or approved any solicitation, subagreement, or third party contract at any tier, neither City shall have any obligations or liabilities to such other party. Page 13 15-21 D. Administrative Claims Requirements and Procedures. No suit or arbitration shall be brought arising out of this agreement, against the City unless a claim has~first been presented in writing and filed with the City and acted upon by the City in accordance with the procedures set forth in Chapter 1.34 of the Chula Vista Municipal Code, as same may from time to time be amended, the provisions of which are incorporated by this reference as if fully set forth herein, and such policies and procedures used by the City in the implementation of same. Upon request by City, Consultant shall meet and confer in good faith with City for the purpose of resolving any dispute over the terms of this Agreement. E. Administration of Contract. Each party designates the individuals ("Contract Administrators") indicated on Exhibit A, Paragraph 12, as said party's contract administrator who is authorized by said party to represent them in the routine administration of this agreement. F. Term. This Agreement shall terminate when the Parties have complied with all executory provisions hereof. G. Attorney's Fees. Should a dispute arising out of this Agreement result in litigation, it is agreed that the prevailing party shall be entitled to a judgment against the other for an amount equal to reasonable attorney's fees and court costs incurred. The "prevailing party" shall be deemed to be the party who is awarded substantially the relief sought. H. Statement of Costs. In the event that Consultant prepares a report or document, or participates in the preparation of a report or document in performing the Defined Services, Consultant shall include, or cause the inclusion of, in said report or document, a statement of the numbers and cost in dollar amounts of all contracts and subcontracts relating to the preparation of the report or document. I. Consultant is Real Estate Broker and/or Salesman. If the box on Exhibit A, Paragraph 15 is marked, the Consultant and/or their principals is/are licensed with the State of California or some other state as a licensed real estate broker or salesperson. Otherwise, Consultant represents that neither Consultant, nor their principals are licensed real estate brokers or salespersons. Notices. All notices, demands or requests provided for or permitted to be given pursuant to this Agreement must be in writing. All notices, demands and requests to be sent to any party shall be deemed to have been properly given or served if personally served or deposited in the United States mail, addressed to such party, postage prepaid, registered or certified, with return receipt requested, at the addresses identified herein as the places of business for each of the designated parties. K. Integration. This Agreement, together with any other written document referred to or contemplated herein, embody the entire Agreement and understanding between the parties relating to the subject matter hereof. Neither this Agreement nor any provision hereof may be amended, modified, waived or discharged except by an instrument in writing executed by the party against which enforcement of such amendment, waiver or discharge is sought. Page 14 15-22 L. Capacity of Parties. Each signatory and party hereto hereby warrants and represents to the other party that it has legal authority and capacity and direction from its principal to enter into this Agreement, and that all resolutions or other actions have been taken so as to enable it to enter into this Agreement. M. Governing Law/Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Any action arising under or relating to this Agreement shall be brought only in the federal or state courts located in San Diego County, State of California, and if applicable, the City of Chula Vista, or as close thereto as possible. Venue for this Agreement, and performance hereunder, shall be the City of Chula Vista. (End of page. Next page is signature page.) Pale 1 15-23 Signature Page - to Agreement between City of Chula Vista and Financial Consulting Solutions Group, Inc. for Developing aFive-Year Cost of Service and Rate Study for Sewer Services IN WITNESS WHEREOF, City and Financial Consulting Solutions Group, Inc. have executed this Agreement thereby indicating that they have read and understood same, and indicate their full and complete consent to its terms: Dated: City of Chula Vista By: Cheryl-Cox, Mayor Attest: Donna Norris, City Clerk Approved as to form: Glen Googins, City Attorney Dated: Financial Consulting Solutions Group, Inc. _ .- ~- .-> By: L' Edward Cebron QA/QC Exhibit List to Agreement (X) Exhibit A. 15-24 Page 16 Exhibit A to Agreement between City of Chula Vista and Financial Consulting Solutions Group, Inc. 1. Effective Date of Agreement: (Date of Council ap rp oval} 2. City-Related Entity: (X) City of Chula Vista, a municipal chartered corporation of the State of California (}Redevelopment Agency of the City of Chula Vista, a political subdivision of the State of California ()Industrial Development Authority of the City of Chula Vista, a ()Other: , a [insert business form] ("City") 3. Place of Business for City: City of Chula Vista 276 Fourth Avenue Chula Vista, CA 91910 4. Consultant: Financial Consulting Solutions Group, Inc. 225 Bush Street, Suite 1825 San Francisco, California 94104 5. Business Form of Consultant: {-)Sole Proprietorship ( )Partnership (X) Corporation 6. Place of Business, Telephone and Fax Number of Consultant: 225 Bush Street, Suite 1825 San Francisco, California 94104 Voice Phone: (415) 445-8947 Fax Phone: (415) 398-1601 7. General Duties: The Consultant shall prepare aFive-Year Cost of Service and Rate Study for Sewer Services (Rate Study) to the satisfaction of the City's Director of Public Works. Page 17 15-25 The Rate Study will provide a comprehensive review and evaluation of the City of Chula Vista's existing sewer rates, review revenues and revenue requirements, determine reserve levels, and perform cost of service and rate analyses to ensure the financial stability of the sewer enterprise for the next five fiscal years. The objectives of the Rate Study are as follows: Obi ectives 1) Financial Planning: Revenue requirements will be projected for afive-year period from fiscal year 2012-2013 through fiscal year 2016-2017. Financial planning involves estimation of annual O&M and capital expenditures, inter-fund transfers, annual reserve requirements, operating and capital revenues, and the determination of required annual sewer service revenues from rates and charges. 2) Cost of Service: The cost of service involves the apportioning of annual revenues required from rates to the different user classes in proportion to their demands on the sewer system. 3) Rate Desi ri: Rate design involves the development of a fixed and variable schedule of sewer rates for each of the different user classes to reflect the required revenue adjustments made during the financial planning phase. 4) Reserve I/evels: To determine the reserve levels needed to provide cash resources to reinvest in sewer infrastructure and to accommodate any natural variability in revenues and expenditures, including potential disruptions of cash flow. All the financial services shall be completed in accordance with this agreement as described in Paragraph 8, Scope of Work and Schedule. Scope of Worlc and Scheduler A. Detailed Scope of Work I. Research 1) Consultant shall review all relevant studies, including the 2008 Rate Study, 2010 Cost of Service and Rate Study Update for Sewer Services and 2011 Cost of Service and Rate Study Update for Sewer Services. 2) Consultant shall review the draft Chula Vista's wastewater reserve policy. The City is in the process of establishing a new wastewater reserve policy in fiscal year 2011-12. 3) Consultant shall review the draft "Acquisition of Additional Wastewater Capacity Project" prepared by RMC describing the alternatives for the City to increase its wastewater treatment and disposal capacity with a new City-owned facility. 4) Consultant shall hold a project kick-off meeting with City staff to discuss initial data collection, project objectives, and to establish appropriate contacts and lines of communication. 15-26 Pale 18 5} Consultant shall develop and submit a preliminary data request prior to the project kick-off meeting so that readily available materials can be assembled. II. Five-Year Financial Plan and Annual Revenue Requirement 1) Consultant shall develop afive-year rate revenue requirement based on the fiscal year 2011-2012 operating budget, capital improvement program, loans and debt service schedules. The financial plan shall evaluate the cash flow projections showing the financial position of the City over the next 10 fiscal years. The financial plan will also reflect non-rate revenue sources and financial policies. 2) The five-year financial plan shall also include consideration of capital program financial strategies, including assessment of whether additional debt may be warranted to fund the capital program. 3) Consultant shall evaluate the existing Sewer Facility Replacement Fee, and evaluate revenues and revenue requirements ensuring the financial sustainability of the Sewer Facility Replacement Fund. The sewer facility replacement requirements based on operating and capital budgets through 2017 (2012 included in "2011 Cost of Service and Rate Study Update for Sewer Services"). 4) Consultant shall develop an estimate of the annual rate revenue requirement. This is the amount of revenues that should be generated by wastewater rates (taking into consideration other revenue sources) 'for the budget year under consideration. 5) Consultant shall create a wastewater financial plan that will provide the City with funding strategy that considers short- and long-term capital and operational needs, as well as customer usage changes due to modifications of the rate structures. 6) Consultant shall incorporate the City's capital improvement program within its analysis. Consultant shall work with the City to define a capital funding strategy based on the utility's current bonds, replacement and expansion needs, fiinding sources, and rate impacts. Consultant shall appropriate cost "S"-curves that take into account the timing, duration, and- costs of specific projects translating appropriated cost (mid-point of construction, etc.) into actual cash flow expenditures. This analysis will allow City staff to review and assess the feasibility of any proposed projects from a fiscal perspective 15-27 Page 19 before investing time and money evaluating potential projects from an engineering standpoint. Consultant shall also examine various capital funding alternatives and make final recommendations. III. Identify and Evaluate Customer, Water Use, and Wastewater Loading Characteristics 1) Consultant shall examine the City's current wastewater user classifications and summarize the current number of customers by customer class and service provided. 2) Consultant shall examine the City's current types of sewer funds and provide recommendations as to the actual types of sewer funds to be kept by the City. 3) Consultant shall examine wastewater-loading characteristics of each customer class as well as Metro system flows and incorporate findings into the Rate Study^ 4) Consultant shall review pass through requirements and shall make recommendations regarding consistency and clarity to ensure all stakeholders' interests are maintained. 5) Consultant shall recommend a process to transition City's low income discount programs to conform with the limitations imposed by Proposition 218. 6) Consultant shall develop graphical presentations of water use and other customer data (if necessary) to illustrate the implications of various rate design choices. 7) Consultant shall analyze the City's wastewater customer data using SPSS statistical software, which allows for detailed customer billing records to be quickly and easily disseminated. 8) Consultant shall create a mass balance linking the City's metered flows and loadings back to the various customer classes. Consultant shall apply loading assumptions and return to sewer factors based on industry standards, San Diego County specific factors, and work with sister agencies. Pane 20 15-28 `~ IV. Wastewater Cost Allocation 1) Consultant shall examine the City's budget and cost data to allocate costs to customer, capacity, and commodity components. 2) Consultant shall follow the requirements of the State Water Resources Control Board's Revenue Program Guidelines. 3) Consultant shall allocate identified costs to appropriate cost components using an agreed upon cost allocation methodology. Fixed and variable costs shall be identified based on the level of detail available in the budget and accounting records. 4) Consultant shall develop unit costs for each category. 5) Consultant shall evaluate the current billing methodologies for all users in the City and malce recommendations for a unified billing methodology. Consultant shall provide backup for the recommendation. Customers under Otay Water District are billed for water and sewer services monthly on the same bill by Otay Water District. Customers in the Sweetwater Authority's jurisdiction are billed bi-monthly by the City's Finance Department. Montgomery area customers are billed for sewer services bi-annually on the property tax bill. V. Rate Design 1) Consultant shall determine rates taking into consideration total annual revenue requirements, allocated costs of service, City policy considerations and compliance with state guidelines. 2) Consultant shall recommend a rate structure that satisfies customer concerns, meet financial needs, stabilize revenue stream, and attain policy objectives. VI. Reserve Policy 1) Consultant shall evaluate the draft City's wastewater reserve policy and make final recommendations ensuring consistency with wastewater industry practices and compliance with current federal and state regulations. 2) Consultant shall utilize available information to analyze the potential impacts on Chula Vista customers should the City of San Diego decide to upgrade its Page 21 15-29 Point Loma Treatment Plant from Advanced Primary to Secondary, in order to comply with the Environmental Protection Agency's (EPA) Ocean Pollution Reduction Act COPRA). 3) Consultant shall establish dedicated reserves from current revenues (i.e. creating an asset annuity). The reserve levels shall be consistent with wastewater industry practices, the ongoing Wastewater Asset Management Program and City's future cash flow needs. VII. Integrate Revenue Collection for Sewer Facilities Replacement Fee and Storm ~YA711 FPP 1) Consultant shall evaluate the sewer rate structure and make final recommendations to ensure that the Sewer Facilities Replacement Fee and Storm Drain Fee are integrated with the Sewer Service Fee and are billed in accordance with the adopting resolutions (or ordinances). 2) Consultant shall evaluate and make final recommendations to the existing Sewer Facility Replacement Fee, revenues and revenue requirements. VIII. Financial Model Development 1) Consultant shall review the existing wastewater financial and rate model, defining linkages, flow of funds, and existing approaches. Consultant shall develop a wastewater financial model that is specifically tailored to the needs of the City's wastewater financial and engineering staff. At the conclusion of the study, Consultant shall hold ahalf--day on-site training workshop with staff to transition the model to staff for ongoing usage. 2) Consultant shall develop a cash flow model showing the financial position of the City over the next ten (10) fiscal years. The cash flow projections shall estimate future revenues, expenses, fund balances, and debt service coverage. Key policy and financial assumptions shall be clearly identified. 3) The wastewater financial model shall consist of three main areas -inputs; analysis; and outputs. Additionally, the model will include specific enhancements as described below. The various input modules of the revenue program shall include: • Operations and Maintenance (O&M): This module of the program defines the utility's operating expenses at a summary level. Each operating expense line is escalated in future years by a cost escalation factor. A series of escalation factors will be incorporated into the model, Pa6e 2? 15-30 `" allowing the user to tailor the escalation factors. For- example, many costs will increase by general inflation, while power and labor will have their own specific escalation factors. Capital Improvement Program: This module of the program houses and summarizes the capital project planning for each utility. It summarizes the active capital scenario and breaks down project costs into various categories (e.g., by project type, funding source, Community Plan Areas, etc.). Debt Service: This module of the program identifies each utility's existing debt obligations and projected debt issuances. Principal and interest payments are identified on an annual basis. This module also houses the assumptions used for calculating debt payments on projected debt issuances. Funds Tracking: This module of the program identifies each utility's fund balances on an annual basis. This module also outlines each utility's planned method of funding for the projects listed in the Capital Improvement Program of the module. Funding sources include but not limited to: Grants, Impact Fees, Pay-As-You-Go, Loans, and Bonds. The analysis module of the revenue program will allow the user to run up to six side-by-side revenue scenarios. This analysis shall be comprised of the following: • Financial Scenario: Four financial scenarios will be built into the financial model. The financial scenario allows the user to evaluate and compare different financial assumptions related to escalation factors, operating assumptions, rates, and fiscal policies. • Capital Scenario: Four financial scenarios will be built into the financial .model. This module allows the user to evaluate and compare different capital projects as they assemble a Capital Improvement Plan. Based on defined timing and cost assumptions, the Capital Scenario fiznction allows the user to evaluate capital needs and the resulting user rates and impact fees. Scenario Builder: This function of the revenue program will allow a user to define which financial and capital scenarios are active. The information and data input. into these active scenarios will populate the rest of the financial model and will be used as the basis for calculating necessary rate increases and developing summary outputs. The scenario builder page also includes a scenario comparison tool. The comparison tool allows for a user to compare multiple scenarios and view the results of each scenario next to other scenarios. The outputs modules of the revenue program are: Page 23 15-31 • Revencce Requirement: This module determines the amount of revenue that must be generated through rates and fees in order to meet its various financial obligations, such as operating expenses, capital needs, and debt obligations, including bond coverage. • Summaries: This module provides cash flow summary, rates summary, debt summary, and funds summary. • Graphic Outputs: This module provides includes graphs illustrating the outcomes of the analysis as described below. 4) Model enhancement features shall include the following: Budget Tracking Module The core model being built for the City will allow the user to input and override annual O&M data with projections, adopted budgets, updated budgets, mid-year projections, and year-end revenue. and expenditure data. The budget tracking module can be developed which stores information for all different phases of the City's revenue and expenditure budgets. This tool allows staff to view historic data, and to compare budgets and year-end actuals. These variances can be used to determine if O&M budgets have historically tracked high or low compared to realized expenditures and revenues. Enhanced Charts and Graphics The Enhanced Charts and Graphics module turns pre-defined, static graphs and charts into dynamic charts. Consultant shall work closely with City staff to determine what type of information is to be included in the graphs, as well as the appropriate graph type. The objective of -these dynamic charts and graphs is to give the presenter the ability to help provide focus to the audience, whether the presentation is with internal colleagues or the City Council. Report Generation Tool Consultant shall develop a report generation tool which uses results of financial analyses in order to develop an easy to understand one page report. This report will be tailored specifically to the City's needs and can include items such as total operating and capital expenditures, projected rate increases, capital budgets, capital funding strategies, rate comparisons between customer classes, and other summary level information. Depending on staff s needs, this report can be distributed without edits, or it can be used as the basis for a more detailed report. The intent of this tool is to reduce the time required of staff to generate reports that will be regularly updated and distributed. For example, the report may generate an annual CIP Programming Guide, which 15-3 2 Page 24 captures project details on each capital project and combines it into a report that can be sent to Council during the budget approval process. Security Feature If the City intends to share the model with multiple users, as well as have multiple people updating portions of the model, security features can be incorporated in order to provide a greater level of quality control. With this feature, different levels of access can be assigned to various users. The model shall incorporate three levels of security: Admin Permission, Intermediate Permission, and the Casual User. Admins have the capability of accessing all area of the model, while intermediate users are only allowed to modify areas specifically designated by Admins. Intermediate Users can be granted access to updates areas such as the O&M budget, outstanding debt schedules, or other areas that require annual updates. Casual users are limited to scenario exploration. This allows them to evaluate their own scenarios, but protects the model from becoming accidently changed and corrupting the data in the model. Security access can be uniquely set up to meet the needs of the City. 5) All models and modules used to develop unit costs, graphics, and design rates will become the property of Chula Vista and must be compatible with Microsoft Office 2003 and up. The City will send a written notification to the Consultant prior to distributing the financial model to outside vendors. IX. Proiect Management 1} Consultant shall provide project management tasks including staffing assignments, budget administration, and preparation of brief progress reports to be submitted to the City prior to attending progress meetings. 2) Consultant shall prepare for and attend progress meetings with City staff to discuss overall progress and schedule of the Plan. Twelve (12) progress meetings shall be scheduled monthly or bi-monthly through the course of the project and at least three (3) of those meetings will be onsite. 3) Consultant shall provide QA/QC for project tasks. X. Community Outreach Prog am 1) The Consultant shall conduct a workshop for the public and development community that will be designed to communicate the financial needs of the utility and the resulting rate increases, as well as gather input from the City's stakeholder. Consultant shall prepare the first draft public outreach materials for the City staff to review in advance of any presentations. 2) Consultant shall create an online survey to be available throughout the duration of the project. Page 23 15-33 XI. City Council Presentation 1) Consultant shall conduct a series of one-on-one presentations with the City Council members over a two day period. These meetings will allow the Consultant and City staff to present the study findings and recommendations, allow Council members to ask questions and provide guidance as necessary. 2) Consultant shall present the final study recommendations to the City Council (estimated to be in May 2012) during a public hearing presentation. Consultant shall create and review all public outreach material with staff in advance of any presentations. XII. Final Plan 1) Following the City's review and approval of the Rate Study, the consultant shall provide 10 copies of the final version of the Rate Study to be presented to various City leaders and to be made available to the public. One (1) copy must be printed on one side only and clipped together (not bound) to facilitate copying. The consultant shall provide a master electronic copy of the text document in word format, an ArcView GIS format of the graphics and a copy, in PDT' format, on CD-ROM for future duplicating needs. 2) Consultant shall develop a compilation report, which will integrate the Sewer Service Fee, the Sewer Facilities Replacement Fee, and the Storm Drainage Fee. 3) The report shall contain an executive surnrnary that provides a clear and concise overview of the study and its recommendations. The main body of the report shall provide additional detail and supporting charts and graphs. Consultant shall provide copies of the draft report for staff review and comment. Based on staff review and comment, Consultant shall finalize and issue ten (10) printed copies of the final report to the City. B. Date for Commencement of Consultant Services: (X) Same as Effective Date of Agreement ()Other: C. Dates or Time Limits for Delivery of Deliverables: Consultant shall complete the Defined Services by Consultant as shown in Section 8- Scope of Work Tasks I to XII no later than May 30, 2012. D. Date for completion of all Consultant services: November 30, 2012 9. Materials Required to be Supplied by City to Consultant: Paae 2b 15-34 v 10. Compensation: A. ()Single Fixed Fee Arrangement. For performance of all of the Defined Services by Consultant as herein required, City shall pay a single fixed fee in the amounts and at the times or milestones or for the Deliverables set forth below: Single Fixed Fee Amount: Milestone or Event or Deliverable payable as follows: Amount or Percent of Fixed Fee () 1. Interim Monthly Advances. The City shall make interim monthly advances against the compensation due for each phase on a percentage of completion basis for each given phase such that, at the end of each phase only the compensation for that phase has been paid. Any payments made hereunder shall be considered as interest free loans that must be returned to the City if the Phase is not satisfactorily completed. If the Phase is satisfactorily completed, the City shall receive credit against the compensation due for that phase. The retention amount or percentage set forth in Paragraph 19 is to be applied to each interim payment such that, at the end of the phase, the full retention has been held back from the compensation due for that phase. Percentage of completion of a phase shall be assessed in the sole and unfettered discretion by the Contracts Administrator designated herein by the City, or such other person as the City Manager shall designate, but only upon such proof demanded by the City that has been provided, but in no event shall such interim advance payment be made unless the Contractor shall have represented in writing that said percentage of completion of the phase has been performed by the Contractor. The practice of malting interim monthly advances shall not convert this agreement to a time and materials basis of payment. B. ( ) Phased Fixed Fee Arrangement. For the performance of each phase or portion of the Defined Services by Consultant as are separately identified below, City shall pay the fixed fee associated with each phase of Services, in the amounts and at the times or milestones or Deliverables set forth. Consultant shall not commence Services under any Phase, and shall not be entitled to the compensation for a Phase, Lmless City shall have issued a notice to proceed to Consultant as to said Phase. (} 1. Interim Monthly Advances. The City shall make interim monthly advances against the compensation due for each phase on a percentage of completion basis for each given phase such that, at the end of each phase only the compensation for that phase has been paid. Any payments made hereunder shall be considered as interest free loans that must be returned to the City if the Phase is not satisfactorily completed. If the Phase is satisfactorily completed, the City shall receive credit against the compensation due for that phase. The retention amount or percentage set forth in Paragraph 19 is to be applied to each interim payment such that, at the end of the phase, the full retention has been held back from the compensation due for that phase. Percentage of completion of a phase shall be assessed in the sole and Page 27 15-35 `~ unfettered discretion by the Contracts Administrator designated herein by the City, or such other person as the City Manager shall designate, but only upon such proof demanded by the City that has been provided, but in no event shall such interim advance payment be made unless the Contractor shall have represented in writing that said percentage of completion of the phase has been performed by the Contractor. The practice of making interim monthly advances shall not convert this agreement to a time and materials basis of payment. C. (X) Hourly Rate Arrangement Not to Exceed Limit Per Phase. For performance of the Defined Services by Consultant as shown in Section 8- Scope of Work Tasks I to XII and, City shall pay Consultant for the productive hours of time spent by Consultant in the performance of said Services not to exceed the limit fee per phase, at the rates or amounts set forth in the Rate Schedule herein below, or the fee amount designated for each phase in chart below, whichever is less, according to the following terms and conditions: Fee for Said j Phase ~ ~ Phase Research -Includes items in Section 8.A.I (1-5) above, as well as the i $4,690 kickoff meeting. A working paper or memorandum as approved by the Director of Public Works discussing the relevant documents and issues and providing recommendations for updates, changes and additions to the 2008 Cost of Service and Rate Study Update for j Sewer Services. 2. ~ Financial Plan and Revenue Requirement - A worl~ing paper or j $7,580 j ~~ memorandum as approved by the Director of Public Works on the wastewater financial plan that will provide the City with a funding 1 !strategy that considers near- and long-term capital and operational 'needs, as well as customer usage changes due to modifications of the rate structures, and other elements addressed in Section 8:A.II (1-6) above. E .................._.... 3. .._....__.........................__._..........._...~..............._ ..._........__.._.._......._._............_._....__..__...._.._..._......------- - ;Customer, Water Usage, & Loadings - A working paper or $7,655 memorandum as approved by the Director of Public Works on the City's wastewater customer data using SPSS statistical software, which allows for detailed customer billing records to be quickly and i 'easily disseminated and other elements addressed in Section 8.A.III ~ I (1-8) above. 4. ~ Wastewater Cost Allocation - A working paper or memorandum as $3,738 ;approved by the Director of Public Works on costs allocated to j j ;functional category (flow and loadings). Costs should be assigned to ~ customer class based on their unique demands on the system and other i ;elements addressed in Section 8.A.IV (1-5) above. i 5. 'Rate Design- A working paper or memorandum as approved by the ~ $6,878 ;Director of Public Worlcs on rate structure alternatives that satisfy Page 28 15-36 y 'customer concerns, meet financial needs, attain policy objectives, i ;provide customer equity, and promote water conservation and other ~ elements addressed in Section 8.A.V (1-2) above. j 6. ~ Reserve Policy- A working paper or memorandum as approved by the $3,878 Director of Public Works on cash reserves consistent with wastewater industry practices, the ongoing Wastewater Asset Management Program and City's future cash flow needs and other elements addressed in-Section-8 _A.VI (1-3)-above.'._......---._.......__._...-----__---._......._...._._._.._._...-_..._.._..........----_l!...- a ~-----......_ ........................_._........_.._.... f . . .......... 7. ..._ ....... i ~, Integrate Fees and Final Report - Submit a Rate Study as approved by ~ $10,975 the Director of Public Works addressed in Section 8.A. VII (1-2) and ~ XII (1-3) above. ~ 8. ~ Presentations. Includes Public/Developer Presentation, Council $13,545 Workshops, and City Council Presentation and other elements ~ . addressed in Section 8.A X (1-2) and XI (1-2) above. 9. ;Model Development- Deliver a wastewater financial model as $12,610 approved by the Director of Public Works and other elements i ~ addressed in Section 8.A.VIII (1-4) above. , ___ _ 10. _ ~ Project Manage"ment- Elements addressed in Section IX (1-3) above ~ Included in ~ 1 ~~ are included in other tasks. ~ other phases ~ ' For a total amount of: $71,549 Upon mutual agreement, Consultant shall perform additional tasks, other than Defined Services by Consultant as shown in Section 8- Scope of Work Tasks I to XII, if requested in writing by the Director of Public Works and under the same terms and conditions {same Rate Schedule herein) of this Agreement. (1) (X) Not-to-Exceed Limitation on Time and Materials Arrangement Notwithstanding the expenditure by Consultant of time and materials in excess of said Maximum Compensation amount, Consultant agrees that Consultant will perform all of the Defined Services herein required of Consultant for $71,549, including all Materials, and other "reimbursables" ("Maximum Compensation"). (2) ()Limitation without Further Authorization on Time and Materials Arrangement At such time as Consultant shall have incurred time and materials equal to ("Authorization Limit"), Consultant shall not be entitled to any additional compensation without further authorization issued in writing and approved by the City. Nothing herein shall preclude Consultant from providing additional Services at Consultant's own cost and expense. Page 29 15-37 y Rate Schedule4 Category of Employee Principal StudyMana~er Project Manager Project Consultant QA/QC Analyst Administrative Support Name of Consultant Hourly Rate Robert Grantham $ 215 Nicholas Almeida $ 180 Matthew Mullen $ 150 Edward Cebron $ 235 Ryan Blake $ 125 $ 70 ()Hourly rates may increase by 6% for services rendered after [month], 20, if delay in providing services is caused by City. 11. Materials Reimbursement Arrangement For the cost of out of pocket expenses incurred by Consultant in the performance of services herein required, City sh~l pay Consultant at the rates or amounts set forth below: (X) None, the compensation includes all costs. Cost or Rate O Reports, not to exceed $ $ (} Copies, not to exceed $ $ O Travel, not to exceed $ $ O Printing, not to exceed $ $ O Postage, not to exceed. $ $ () Delivery, not to exceed $ $ (} Long Distance Telephone Charges, not to exceed $ $ () Other Actual Identifiable Direct Costs: $ not to exceed $ $ ,not to exceed $ $ 12. Contract Administrators: City: Roberto Yano, Senior Civil Engineer Public Services Building 276 Fourth Avenue Chula Vista, California 91910 Phone: (619) 476-2402 Page 30 15-38 Consultant: Edward Cebron, QA/QC Financial Consulting Solutions Group, Inc. 225 Bush Street, Suite 1825 San Francisco, California 94104 (415) 445-8947 /FAX: (415) 398-1601 13. Liquidated Damages Rate: ()$ ()Other: per day. 14. Statement of Economic Interests, Consultant Reporting Categories, per Conflict of Interest Code: (X) Not Applicable. Not an FPPC Filer. O FPPC Filer ()Category Nod 1. Investments and sources of income. ()Category No. 2. Interests in real property. ()Category No. 3. Investments, interest in real property and sources of income subject to the regulatory, permit or licensing authority of the department. ()Category No. 4. Investments in business entities and sources of income that engage in land development, construction or the acquisition or sale of real property. ()Category No. 5. Investments in business entities and. sources of income of the type which, within the past two years, have contracted with the City of Chula Vista (Redevelopment Agency) to provide services, supplies, materials, machinery or equipment. OCategory No. 6. Investments in business entities and sources of income of the type which, within the past two years, have contracted with the designated employee's department to provide services, supplies, materials, machinery or equipment. OCategory No. 7. Business positions. Page 31 15-39 ()List "Consultant Associates" interests in real property within 2 radial miles of Project Property, if any: 15. OConsultant is Real Estate Broker and/or Salesman 16. Permitted Subconsultants: 1. Bill Processing: A. Consultant's Billing to be submitted for the following period of time: (X } Monthly ()Quarterly ()Other: B. Day of the Period for submission of Consultant's Billing: ()First of the Month () 15th Day of each Month (X) End of the Month ()Other: C. City's Account Number: 41410-6301 (KY-807 2. Security for Performance OPerformance Bond, $ ()Letter of Credit, $ ()Other Security: Type: Amount: $ ()Retention. If this space is checked, then notwithstanding other provisions to the contrary requiring the payment of compensation to the Consultant sooner, the City shall be entitled to retain, at their option, either the following "Retention Percentage" or "Retention Page 32 15-40 Amount" until the City determines that the Retention Release Event, listed below, has occurred: Retention Percentage: Retention Amount: $_ Retention Release Event: () Completion of All Consultant Services ()Other: J:\Engineer\SEWER\Studies\Fee Rate Study12011 Rate Study RFP\Agenda Contract\FCS contract.doc Page 33 15-41