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HomeMy WebLinkAboutC-2870II wo C 2$1`a CITY OF ARCADIA PROFESSIONAL SERVICES AGREEMENT REGARDING BUDGET BASED WATER AND SEWER RATES STUDY 1. PARTIES AND DATE. This Agreement is made and entered into this �ay of f 2014 by and between the City of Arcadia, a charter city organized under the Constitution and laws of the State of California with its principal place of business at 240 West Huntington Drive, Arcadia, California 91066 -6021 ( "City ") and Carollo Engineers, a Delaware Corporation, with its principal place of business at 10540 Talbert Avenue, Suite 200 East, Fountain Valley, California 92708 ( "Consultant "). City and Consultant are sometimes individually referred to as "Party" and collectively as "Parties." 2. RECITALS. 2.1 Consultant. Consultant desires to perform and assume responsibility for the provision of certain professional services required by the City on the terms and conditions set forth in this Agreement. Consultant represents that it is experienced in providing engineering consulting services for budget based water and sewer rate structures to public clients, is licensed in the State of California, and is familiar with the plans of City. 2.2 Project. City desires to engage Consultant to render such services for the Budget Based Water and Sewer Rates Study ( "Project ") as set forth in this Agreement. 3. TERMS. 3.1 Scope of Services and Term. 3.1.1 General Scope of Services. Consultant promises and agrees to furnish to the City all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the professional engineering consulting services necessary for the Project ( "Services "). The Services are more particularly described in Exhibit "A" attached hereto and incorporated herein by reference. All Services shall be subject to, and performed in accordance with, this Agreement, the exhibits attached hereto and incorporated herein by reference, and all applicable local, state and federal laws, rules and regulations. Revised 04/13 3.1.2 Term. The term of this Agreement shall be for one year from date of execution, unless earlier terminated as provided herein. Consultant shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines. 3.2 Responsibilities of Consultant. 3.2.1 Control and Payment of Subordinates; Independent Contractor. The Services shall be performed by Consultant or under its supervision. Consultant will determine the means, methods and details of performing the Services subject to the requirements of this Agreement. City retains Consultant on an independent contractor basis and not as an employee. Consultant retains the right to perform similar or different services for others during the term of this Agreement. Any additional personnel performing the Services under this Agreement on behalf of Consultant shall also not be employees of City and shall at all times be under Consultant's exclusive direction and control. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance. 3.2.2 Schedule of Services. Consultant shall perform the Services expeditiously, within the term of this Agreement, and in accordance with the Schedule of Services set forth in Exhibit "B" attached hereto and incorporated herein by reference. Consultant represents that it has the professional and technical personnel required to perform the Services in conformance with such conditions. In order to facilitate Consultant's conformance with the Schedule, City shall respond to Consultant's submittals in a timely manner. Upon request of City, Consultant shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services. 3.2.3 Conformance to Applicable Requirements. All work prepared by Consultant shall be subject to the prior written approval of City. 3.2.4 Substitution of Key Personnel. Consultant has represented to City that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon prior written approval of City. In the event that City and Consultant cannot agree as to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause. As discussed below, any personnel who fail or refuse to perform the Services in a manner acceptable to the City, or who are determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property, shall be promptly removed from the Project by the Consultant at the request of the City. The key personnel for performance of this Agreement are as follows: Robert S. Grantham, Vice President. Revised 04/13 3.2.5 City's Representative. The City hereby designates Tom Tait, Public Works Services Director, or his or her designee, to act as its representative for the performance of this Agreement ( "City's Representative "). City's Representative shall have the power to act on behalf of the City for all purposes under this Contract. Consultant shall not accept direction or orders from any person other than the City's Representative or his or her designee. 3.2.6 Consultant's Representative. Consultant hereby designates Robert S. Grantham, Vice President, or his or her designee, to act as its representative for the performance of this Agreement ( "Consultant's Representative "). Consultant's Representative shall have full authority to represent and act on behalf of the Consultant for all purposes under this Agreement. The Consultant's Representative shall supervise and direct the Services, using his best skill and attention, and shall be responsible for all means, methods, techniques, sequences and procedures and for the satisfactory coordination of all portions of the Services under this Agreement. 3.2.7 Coordination of Services. Consultant agrees to work closely with City staff in the performance of Services and shall be available to City's staff, consultants and other staff at all reasonable times. 3.2.8 Standard of Care; Performance of Employees. Consultant shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Services. Finally, Consultant represents that it, its employees and subcontractors have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, including a City Business License, and that such licenses and approvals shall be maintained throughout the term of this Agreement. As provided for in the indemnification provisions of this Agreement, Consultant shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the Consultant's failure to comply with the standard of care provided for herein. Any employee of the Consultant or its sub - consultants who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed from the Project by the Consultant and shall not be re- employed to perform any of the Services or to work on the Project. 3.2.9 Laws and Regulations. Consultant shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Project or the Services, including all Cal /OSHA requirements, and shall give all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with Services. If the Consultant performs any work knowing it to be contrary to such laws, rules and regulations and Revised 04/13 3 without giving written notice to the City, Consultant shall be solely responsible for all costs arising therefrom. Consultant shall defend, indemnify and hold City, its officials, directors, officers, and employees free and harmless, pursuant to the indemnification provisions of this Agreement, from any claim or liability arising out of any failure or alleged failure to comply with such laws, rules or regulations. 3.2.9.1 Immigration Reform and Control Act. Consultant acknowledges that Consultant, and all subcontractors hired by Consultant to perform services under this Agreement, are aware of and understand the Immigration Reform and Control Act ( "IRCA "). Consultant is and shall remain in compliance with the IRCA and shall ensure that any subcontractors hired by Consultant to perform services under this Agreement are in compliance with the IRCA. In addition, Consultant agrees to indemnify, defend and hold harmless the City, its directors, officials, officers and employees, from any liability, damages or causes of action arising out of or relating to any claims that Consultant's employees, or the employees of any subcontractor hired by Consultant, are not authorized to work in the United States for Consultant or its subcontractor and /or any other claims based upon alleged IRCA violations committed by Consultant or Consultant's subcontractor(s). 3.2.10 Insurance. 3.2.10.1 Time for Compliance. Consultant shall not commence Work under this Agreement until it has provided evidence satisfactory to the City that it has secured all insurance required under this section. In addition, Consultant shall not allow any subcontractor to commence work on any subcontract until it has provided evidence satisfactory to the City that the subcontractor has secured all insurance required under this section; provided, however, that in lieu thereof, the Consultant may provide evidence to the City that all subcontractors are additional insureds under the Consultant's policies of insurance. 3.2.10.2 Minimum Requirements. Consultant shall, at its expense, procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by the Consultant, its agents, representatives, employees, subcontractors and volunteers. Consultant shall also name and obtain insurer's consent to naming City, its directors, officials, officers, and employees as an additional insured with proof of certificate of insurance that they are an additional insured. Such insurance shall meet at least the following minimum levels of coverage: (A) Minimum Scope of Insurance. Coverage shall be when commercially available (occurrence based) at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage for premises and operations, contractual liability, personal injury, bodily injury, independent contractors, broadform property damage, explosion, collapse, and underground, products and completed operations; (2) Automobile Liability: Re, i „ed 04 11 4 Insurance Services Office Business Auto coverage for any auto owned, leased, hired, and borrowed by Consultant or for which Consultant is responsible; and (3) Workers' Compensation and Employer's Liability: Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. The City, its directors, officials, officers, and employees shall be listed as additional insured. Any deductibles or self- insured retentions must be declared to and approved by City and conform to the requirements provided in Section 3.2.10.6 herein. (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, with an aggregate limit of $1,000,000. If Commercial General Liability Insurance or other form with general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limit shall be twice the required occurrence limit; (2) Automobile Liability: $1,000,000 combined single limit per accident for bodily injury and property damage; and (3) Workers' Compensation and Employer's Liability: Workers' Compensation limits as required by the Labor Code of the State of California. Employer's Liability limits of $1,000,000 per accident for bodily injury or disease. 3.2.10.3 Professional Liability. Consultant shall procure and maintain, and require its sub - consultants to procure and maintain, for a period of three (3) years following completion of the Project, errors and omissions liability insurance appropriate to their profession. Such insurance shall be in an amount not less than $1,000,000 per claim, and shall be endorsed to include contractual liability. 3.2.10.4 Insurance Endorsements. The insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms supplied or approved by the City to add the following provisions to the insurance policies: (A) General Liability. The general liability policy shall be endorsed to state that: (1) the City, its directors, officials, officers, and employees shall be covered as additional insured with respect to liability arising out of Services operations and for completed operations performed by or on behalf of the Consultant, including materials, parts or equipment furnished in connection with such work; and (2) the insurance coverage shall be primary insurance as respects the City, its directors, officials, officers, and employees, or if excess, shall stand in an unbroken chain of coverage excess of the Consultant's scheduled underlying coverage. Any insurance or self- insurance maintained by the City, its directors, officials, officers, employees and volunteers shall be excess of the Consultant's insurance and shall not be called upon to contribute with it in any way. Revised 0413 5 (B) Automobile Liability. The automobile liability policy shall be endorsed to state that: (1) the City, its directors, officials, officers, and employees shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Consultant or for which the Consultant is responsible; and (2) the insurance coverage shall be primary insurance as respects the City, its directors, officials, officers, and employees, or if excess, shall stand in an unbroken chain of coverage excess of the Consultant's scheduled underlying coverage. Any insurance or self- insurance maintained by the City, its directors, officials, officers, and employees shall be excess of the Consultant's insurance and shall not be called upon to contribute with it in any way. (C) Workers' Compensation and Employers Liability Coverage. The insurer shall agree to waive all rights of subrogation against the City, its directors, officials, officers, and employees for losses paid under the terms of the insurance policy which arise from work performed by the Consultant. (D) All Coverages. Each insurance policy required by this Agreement shall be endorsed to state that: (A) coverage shall not be, reduced or canceled except after thirty (30) days prior written notice by certified mail, return receipt requested of cancellation, of intended non - renewal or endorsement reduction in limit or scope of coverage; provided, however, that in the event of cancellation due solely to non - payment of premium, ten (10) days notice of cancellation for non - payment of premium may instead be given to the City.; and (B) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the City, its directors, officials, officers, and employees. 3.2.10.5 Separation of Insureds; No Special Limitations. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the City, its directors, officials, officers, and employees. 3.2.10.6 Deductibles and Self- Insurance Retentions. Any deductibles or self- insured retentions must be declared to and approved by the City. Consultant shall guarantee that, at the option of the City, either: (1) the insurer shall reduce or eliminate such deductibles or self- insured retentions as respects the City, its directors, officials, officers, and employees; or (2) the Consultant shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses. 3.2.10.7 Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating no less than A:VII, admitted or approved to do business in California, and satisfactory to the City. Revised 04/13 6 3.2.10.8 Verification of Coverage. Consultant shall furnish City with complete and accurate copies of current certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the City. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the City if requested. Copies of all certificates and endorsements must be received and approved by the City before work commences. The City reserves the right to require complete, certified copies of all required insurance policies, at any time. 3.2.10.9 Safety. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Consultant shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed. Safety precautions as applicable shall include, but shall not be limited to: (A) adequate life protection and life saving equipment and procedures; (B) instructions in accident prevention for all employees and subcontractors, such as safe walkways, scaffolds, fall protection ladders, bridges, gang planks, confined space procedures, trenching and shoring, equipment and other safety devices, equipment and wearing apparel as are necessary or lawfully required to prevent accidents or injuries; and (C) adequate facilities for the proper inspection and maintenance of all safety measures. 3.2.10.10 Material Breach. Lack of insurance does not negate Consultant's obligations under this Agreement. Maintenance of proper insurance coverage is a material element of this Agreement and failure to maintain or renew coverage or to provide evidence of renewal may be treated by the City as a material breach of the Agreement. 3.3 Fees and Payments. 3.3.1 Compensation. Consultant shall receive compensation, including reimbursements which receive the City's prior written authorization, for all Services rendered under this Agreement at the rates set forth in Exhibit "C" attached hereto and incorporated herein by reference. The total compensation shall not exceed EIGHTY - NINE THOUSAND, NINE HUNDRED FIVE DOLLARS AND NO CENTS, ($89,905.00) without written approval of the City Manager. Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement. 3.3.2 Payment of Compensation. Consultant shall submit to City a monthly itemized statement which indicates work completed and hours of Services rendered by Consultant. The statement shall describe the amount of Services and supplies provided since the initial commencement date, or since the start of the subsequent billing periods, as appropriate, through the date of the statement. City Key i >ed 04 I3 7 shall, within forty -five (45) days of receiving such statement, review the statement and pay all approved charges thereon. 3.3.3 Reimbursement for Expenses. Consultant shall not be reimbursed for any expenses unless prior written authorization is obtained from the City. 3.3.4 Extra Work. At any time during the term of this Agreement, City may request that Consultant perform Extra Work. As used herein, "Extra Work" means any work which is determined by City to be necessary for the proper completion of the Project, but which the parties did not reasonably anticipate would be necessary at the execution of this Agreement. Consultant shall not perform, nor be compensated for, Extra Work without prior written authorization from City's Representative. 3.4 Accounting Records. 3.4.1 Maintenance and Inspection. Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement. 3.5 General Provisions. 3.5.1 Termination of Agreement. 3.5.1.1 Grounds for Termination. City may, by written notice to Consultant, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Consultant of such termination, and specifying the effective date thereof, at least seven (7) days before the effective date of such termination. Upon termination, Consultant shall be compensated only for those services which have been adequately rendered to City, and Consultant shall be entitled to no further compensation. Consultant may not terminate this Agreement except for cause. A termination without cause by City shall not act as or be deemed a waiver of any potential known or unknown City claims associated with Consultant's performance prior to the date of termination. 3.5.1.2 Effect of Termination. If this Agreement is terminated as provided herein, City may require Consultant to provide all finished or unfinished Documents and Data and other information of any kind prepared by Consultant in connection with the performance of Services under this Agreement. Consultant shall be required to provide such document and other information within fifteen (15) days of the request. Revised 04/13 H 3.5.1.3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. 3.5.2 Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose: Consultant: Carollo Engineers 10540 Talbert Avenue, Suite 200 East Fountain Valley, CA 92708 Attn: Robert S. Grantham, Vice President City: City of Arcadia 240 West Huntington drive Arcadia, CA 91007 Attn: Tom Tait, Public Works Services Director Such notice shall be deemed made when personally delivered or when mailed, forty - eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. 3.5.3 Ownership of Materials and Confidentiality. 3.5.3.1 Documents & Data; Licensing of Intellectual Property. This Agreement creates a non - exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement ( "Documents & Data "). Consultant shall require all subcontractors to agree in writing that City is granted a non - exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Consultant or provided to Consultant by the City. City shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at City's sole risk. 3.5.3.2 Confidentiality. Except as otherwise required by California law, all ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Revised 01 13 9 Documents and Data either created by or provided to Consultant in connection with the performance of this Agreement shall be held confidential by Consultant. Such materials shall not, without the prior written consent of City, be used by Consultant for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to Consultant which is otherwise known to Consultant or is generally known, or has become known, to the related industry shall be deemed confidential. Consultant shall not use City's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City. 3.5.4 Cooperation; Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement. 3.5.5 Indemnification. 3.5.5.1 To the fullest extent permitted by law, Consultant shall defend, indemnify and hold the City, its officials, officers, and employees 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 or incident to any alleged acts, omissions or willful misconduct of Consultant, its officials, officers, employees, agents, consultants and contractors arising out of or in connection with the performance of the Services, the Project or this Agreement, including without limitation the payment of all consequential damages and attorney's fees and other related costs and expenses. Notwithstanding the foregoing, to the extent Consultant's Services are subject to Civil Code Section 2782.8, the above indemnity shall be limited, to the extent required by Civil Code Section 2782.8, to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant. Consultant shall defend with Legal Counsel of City's choosing, at Consultant's own cost, expense and risk, any and all such aforesaid suits, actions or other legal proceedings of every kind that may be brought or instituted against City, its directors, officials, officers, and employees. Consultant shall pay and satisfy any judgment, award or decree that may be rendered against City or its directors, officials, officers, and employees, in any such suit, action or other legal proceeding arising from Consultant's performance of the Services, the Project or this Agreement; except to the extent that liability is caused by the active negligence or willful misconduct by the City or its directors, officials, officers, and employees. Consultant shall reimburse City and its directors, officials, officers, and employees, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the City, its directors, officials, officers, and employees, and shall take effect immediately upon execution of this Agreement. Recited 04 I3 10 3.5.5.2 The duty to defend and to hold harmless, as set forth above, shall include the duty to defend as established by Section 2778 of the California Civil Code, and the duty to defend shall arise upon the making of any claim or demand against the City, its respective officials, officers, agents, employees and representatives, notwithstanding that no adjudication of the underlying facts has occurred, and whether or not Consultant has been named in the claim or lawsuit. 3.5.6 Entire Agreement. This Agreement contains the entire Agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both Parties. 3.5.7 Attorney's Fees. If either party commences an action against the other party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorneys' fees and all other costs of such action. 3.5.8 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in Los Angeles County. 3.5.9 Time of Essence. Time is of the essence for each and every provision of this Agreement. 3.5.10 City's Right to Employ Other Consultants. City reserves right to employ other consultants in connection with this Project. 3.5.11 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the Parties. 3.5.12 Assignment or Transfer. Consultant shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the City. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. 3.5.13 Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to Consultant include all personnel, employees, agents, and subcontractors of Consultant, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, and employees except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement. Revised 04/13 3.5.14 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties. 3.5.15 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise. 3.5.16 No Third Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties. 3.5.17 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. 3.5.18 Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. 3.5.19 Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex, sexual orientation or age. Such non - discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Consultant shall also comply with all relevant provisions of City's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. 3.5.20 Labor Certification. By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self- insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services. 3.5.21 Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Rev ised 04 1 z 12 Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party. 3.5.22 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original. 3.5.23 Exhibits and Recitals. All Exhibits and Recitals contained herein are hereby incorporated into this Agreement by this reference. 3.6 Subcontracting. 3.6.1 Prior Approval Required. Consultant shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of City. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. In witness whereof the Parties have executed this Professional Services Agreement on the date set forth below. CITY OF ARCADIA y -- ominic Lazzarett City Manager 2,0 R Date ATTEST: City Clerk APPROVED AS TO FORM: Stephen P. Deitsch City Attorney Revised 04/13 13 CAROLLO ENGINEERS Byi;� -5 Signature Print Namp and Title Date S Date CONCUR: G7W 146m Tait Public Works Services Director :v. P. EXHIBIT "A" SCOPE OF SERVICES The summary below of the scope of services shall include, but is not limited to the following tasks: Task 1: Proiect Kick -Off and Data Collection - Carollo will hold a project kick -off meeting with City staff. The meeting will outline key objectives and determine priorities. The meeting will also serve as a review point for the study data. Carollo will submit a detailed data request. Task 2: Revenue Requirements Analysis - Carollo will develop a revenue requirement analysis and forecast for the water and sewer enterprises. Each utility will be evaluated independently in order to equitably and accurately recover costs from the respective system customers. Additional tasks under this analysis will include policy review; financial needs forecast; and scenario planning and model development. Task 3: Cost -of- Service Analysis /Proposition 218 Compliance - As various revenue and water demand projections are analyzed, the cost -of- service analysis will evaluate the impacts of various scenarios (Exhibit "A" Attachment — Work Plan). All proposed rate structures will adhere to Proposition 218 requirements and sound cost -of service, rate - making principals. - Carollo will develop a cost allocation based on the City's unique system and consider the AWWA and WEF methodologies. - Carollo will conduct a statistical analysis of the City's past five years of historical customer data and consumption records. Task 4: Rate Design Analysis - The proposed budget based rates structures will be evaluated and designed to generate sufficient revenues while meeting the City's key study objectives. - Carollo will meet with City staff to review and evaluate potential rate structure alternatives that promote an equitable allocation past experience with comparable water and sewer agencies. - Carollo will develop a matrix that outlines: • Advantages and disadvantages of each rate structure alternative. • Nexus between each rate structure and system costs and overall equity between customer classes. A -1 • Effect of rate structures on revenue stability. • Ability and effectiveness of rate structures to meet the City's policy objectives. o Administrative ease. o Potential for legal challenges. - Carollo will analyze a new rate structure to differentiate the impacts of commodity increase to the rate. - The rate structures will be designed to comply with Proposition 218, AB 2882, and relevant case law. Task 5: Study Report - A draft and final version of a summary report will be prepared to present the methodology, process, and findings of the rate study and its recommendations. Task 6: Meetings and Presentations - Carollo will hold structured reviews with City staff during the course of the project. Carollo will also present the study findings to the City Council. Exhibit "A" - Attachment provides an in -depth version of the scope of services required for the Budget Based Water and Sewer Rates Study. A -1 j j EXHIBIT "A" - ATTACHMENT Work Plan PROJECT UNDERSTANDING The City is requesting assistance in the development and application of a budget -based water rate structure and corresponding sewer rate structure. These structures will be founded on a comprehensive financial Plan to provide a cost -of- service basis for the development of defensible and appropriate water and sewer rates. Carollo has performed similar studies for utilities throughout California. Recently, the project team has completed or is in the process of completing financial and rate projects for the Cities of San Francisco, West Sacramento, and Oceanside, as well as OCSD and SDCWA. While no two agencies are exactly alike, we will use this broad expertise to bring unique insights to address the City's specific challenges with creating and implementing a new rate structure. Beyond building from our wealth of experience, Carollo provides the City with unmatched engineering knowledge that will prove crucial in providing the City with a tailored financial and rate analysis to achieve defensible and equitable rates. Given recent case law, Carollo's engineering backstop will provide the City greater confidence that the proposed water and sewer rates will meet Proposition 218 Given the relative complexity of budget -based rates, in order to garner stakeholder buy -in and support for new rate structures, it is necessary to communicate these changes, variables within the City's control, and anticipated future changes. requirements. This approach and scope adheres to the study requirements as defined in the Request for Proposals (RFP), as well as builds from our extensive cost -of- service, engineering, and Proposition 218 expertise. As the City seeks to develop and apply a budget - based water rate structure and corresponding sewer rate structure for single - family and multi- family customers, the City must complete a Proposition 218 compliant rate setting process. This process must: 1) establish a rate structure that is equitable; 2) fund the forecasted O&M and capital plans; and 3) produce a sound and defensible record to address Proposition 218 and recent case law. Carollo will support City staff, legal counsel, and the City Council in developing a consensus throughout the process and on proposed rate structures. Carollo will use workshops to clearly communicate and illustrate the needs of the system and the benefits to vanous users. V: \C1ient23\Arcadia \Rate Structures \lndd\Sec05- WorkPlan.indd Following the significant concerns raised by residential groups regarding the existing tiered rates structure, the underlying question that this study seeks to answer is, "Who pays, how much, and why ?" Multiple items need to be addressed in order to answer this question and true justification of equitable and cost -of- service rates is only possible if a thorough and detailed financial needs assessment or forecast is performed. Should key elements of the financial analysis be overlooked, the reliability of the developed rates and financial forecast is greatly diminished. To provide a baseline of existing rates, Carollo will perform a comprehensive financial evaluation of the City's existing water and wastewater rates. As part of our approach, we will develop a tailored financial model that is user - friendly and uses interactive dashboards to enable a quick and easy evaluation of various potential rate designs. Furthermore, to provide greater revenue certainty, Carollo will run a series of sensitivity analyses, including primary and secondary relationships of key variables, such as the impact of the proposed rates on consumption behavior (conservation) and subsequent revenues collection. This approach enables us to quickly and efficiently identify and focus our efforts on key variables, and develop defensible rates and a sustainable financial plan. Our a tailored approach is designed to most efficiently and productively accomplish the desired objectives, such as developing rates that include both level and conservation structures. Rate studies cannot be performed in a vacuum. Our approach focuses on fusing Carollo's depth of rate, financing, and engineering expertise with the City's input of future operational and strategic goals to provide optimal results. WORK PLAN I� EXHIBIT "A" - ATTACHMENT SCOPE OF WORK The scope of work outlines our proposed approach for undertaking the cost -of- service and rate study. We believe the suggested scope of work presented in the City's RFP provides a strong basis for this assignment. However, if selected, we would be pleased to further refine the specific analyses and deliverables based upon the City's goals and objectives. Task 1: Project Kick -Off and Data Collection Carollo will hold a project kick -off meeting with City staff. The meeting will outline key objectives, determine priorities, and, if necessary, modify the scope of work. The meeting will also serve as a review point for the study data. In advance of the kick -off meeting, Carollo will submit a detailed data request. Each utility will be evaluated independently in order to equitably and accurately recover costs from the respective system customers. Policy Review Fiscal policies, including financial reserves, are an essential building block for any effective utility financial plan and rate study. As with any data -driven analysis, our approach begins with gathering the necessary cost and consumption data to complete the rate study. From the beginning of the study, we will work with the City to identify and collect the date to achieve the desired budget -based approach. These typically include property characteristics such as median household size, property size, irrigation requirements, and evaporation. The City's existing and historical revenue and billing data will be analyzed as a proxy of future projections; however, past consumption or financials are not indicative of future results. This is especially true when developing and implementing new rate structures. Given the advancements in conservation efforts and other possible water demand /supply and financial factors, Carollo will build from our wealth of experience to provide greater context and perspective to the analyzed data and forecasts. While Carollo envisions this project as a collaborative process with City staff, our goal is to provide a management plan that streamlines the process in order to adhere to the desired project schedule and to minimize time requirements placed on staff. Task 2: Revenue Requirements Analysis Carollo will develop a revenue requirement analysis and forecast for the water and sewer enterprises. T4 V: \C1ient23\Arcadia \Rate Structures \lndd \Sec05- WorkPlan.indd Moreover, in presenting any proposed rate plan to the City Council or staff, it will be critical to provide context for rate increases based on sound fiscal policies. We will discuss policy objectives and potential rate impacts. These policies will include, but will not be limited to, appropriate reserve requirements to be maintained on an annual basis for operations, capital projects, emergencies, and rate stabilization. Specifically, we will determine minimum balances and how funds can be used to minimize the impact on rates due to unexpected revenues shortfalls. Financial Needs Forecast At the heart of any utility rate study is a revenue requirement, which uses projected cash flows and debt service requirements to project potential revenue shortfalls. We will incorporate data elements collected throughout the study process to develop a long -range financial forecast that projects operating expenditures; repair, replacement, and other capital needs; and offsetting revenues. The analysis will focus primarily on revenue sufficiency over the next five and ten years based on the City's projected operating, capital, policy, regulatory, and asset management needs. Although most rate increases are limited to five years, it is essential to look long term to provide adequate funding of project beyond the five -year rate setting process and to mitigate potential rate shocks. Our evaluation of financial plans will consider the overall funding strategy including near- and long -term capital and operational needs, as well as potential customer usage changes due to modifications of the rate structures. This analysis will also analyze the revenue and expenditure impacts of supply availability (seasonal and long- term availability) . Beyond the changes to the rate structure, the results of the revenue requirement will WORK PLAN i r a 1 L� I I EXHIBIT "A" - ATTACHMENT define what levels of rate increases are necessary in order to fund ongoing expenditures and to meet the City's policy goals and study objectives. Scenario Planning and Model Development The City's water and sewer rate models will dynamically allow staff to project cash flow needs, evaluate capital alternatives, and visually present information. In addition, the integrated "what -if scenario - builder (or dashboard) will allow staff to test multiple side -by -side financial and rate structure scenarios. Carollo can also make additional model modifications based on City staff preferences. The scenario builder will help the City to better examine the impacts of influencing variables such as input costs, water supply alternatives, capital improvements, etc. Following the completion of this study, the City will receive a copy of the tailored rate model, built within Microsoft® Excel. In addition to the familiarity gained during development of the model, Carollo will provide an easy -to- follow training session to necessary staff. The screenshots below illustrate the graphical and table outputs for the "what -if" scenario builder. Task 3: Cost -of- Service Analysis/ Proposition 218 Compliance The calculated revenue requirements will be allocated to each customer class based on the I uwmte ewe. -fir ._.— ._...._.... dEenBntEi ?EBr�e� Real -time, side -by -side comparisons. calculated capacity and treatment requirements by billable constituent. For the water enterprise, these billable constituents will likely include customer service, base water demand, and peak water demand. For sewer, as wastewater treatment is provided by the Los Angeles County Sanitation District, the City operates the sewer conveyance system only. Consequently, the revenue requirements will be allocated based on customer service and /or flow for the wastewater rates. As various revenue and water demand projections are analyzed, the cost -of- service analysis will evaluate the impacts of these various scenarios. All proposed rate structures will adhere to Proposition 218 requirements and sound cost -of- service, rate - making principles. Allocation of Costs to Functional Categories Carollo will develop a cost allocation based on the City's unique system and consider the AWWA and WEF methodologies. The proposed allocations will reviewed for conformance with established statutory regulations. Carollo will review and incorporate the City's current asset and accounting records. Line -item expenditures will be allocated to customer service, base water usage, and peak water usage. As necessary to address specific customer factors or demands, Carollo will create additional cost allocation factors. Finally, these costs will be assigned to fixed and variable categories in order to develop defensible monthly fixed charges. loom Output revenue requirement analysis and pro forma for each scenario. .i..i..aw... ]•e•. aria __.'— °°"--- oa•s— .`— °°` - - -- °— °°" --- -- t a"W. .wtr 1* Jotr .w JW] J4 Myoved) f�6wly� PrAr1s�. 9.,I]AIO lM.]W.M] WwQJStrw llwi 6�tJaep 2?41.tl0 IJ]],OOy Ipi 6.1 6,J05 IA90.14 0]tl.lw1 1,1]6,IM 51 ?JS I,IU,]O] 651}w 1.]Ot,a9t ],w0 }U �66llwMm 1]es1r.Y �]r lw� O.brµuwsm ]]«. •.e!• !]].fN 565.]1' -n, m4tl6 U..l55 660}w afl.rd t a «,nw, +u • «,rs].se] a .6.1«}61 ] tl,xs,ln . tl }u,6ls : J ,310,6 a T.J.. H4r 6w]ic p.0« }1q ].M.1« Il,ni.m'M 1,0•a.f1a 11,n0 }051 J.M6}]a J} ],y6}]I N X6,}05: 3A6a}]6 11,]6r,90q l,OY,lN . t7D PJWaOyaua Lywtw.r MIw1.�.Y.a.sl�rll.�e - t(fOD LdeRt]Ylww IIaO..% 0,000 ll,]t635] U],000 II,tl4M0 M],000 1],6]t}M x!],000 U,11J,600 13,90}M 11w WtNJw I!0}Ir nt,oao I}0.IJ6 ].n0.9D] Daw C+OYJ I..ry! •W PrJUa«a!!]�t]aws 5,965.lJO IrAt],Y] l.tls,i,J SJJp}q] •,]JJ,UI .166 }U - AYm.rW164oOJwwe{Iwa•Je s,]]gl9a t],OI.A] 166,506.05 5n)]t JY60m.. •a 6]i01�lm�w 0�11m/Tw •Atl,ltl T,Otl,U6 M90.,ln ID,an.U6 tl!,5,0]5 tl,J;6,06 TJJ ]sa,rrew . • as 6 ]n • • ]W • • V: \Gient23\Nrcadia \Rate Structures \lndd \SecO5- WorkPlan.indd WORK PLAN 1' S EXHIBIT "A" - ATTACHMENT In order to equitably recover capital expenditures from both existing ratepayers and future development, the City's CIP will be allocated between existing and future users. Existing users will fund capital improvements related to the repair or replacement of existing facilities, while new users will pay for expansion or reimbursement of existing facilities. Capital improvements allocated to existing users will be funded through the proposed monthly rates. Similar to O&M expenditures, the City's water and sewer capital facilities will be allocated first between new and existing, then by functional category. Customer Data Analysis Following the proposed shift to budget based rates, Carollo will conduct a statistical analysis of the City's past five years of historical customer data and consumption records. Que to the variable nature of the City's water rates, it is important to evaluate a multi-year trend and determine potential revenue lulls during low -usage years. In addition to using Microsoft® Excel, we will use SPSS statistical software to quickly and more efficiently analyze customer billing records and provide usable information, such as consumption breakpoints used in evaluating different rate structures and conservation incentives. This step is essential as inaccurate break points can lead to revenue shortfalls, limited conservation or price signaling efforts, and reduced equity between users. We will examine the usage data and calibrate billing records against actual rate revenues to prevent over or under estimation of the City's customer base. This is a critical step in setting appropriate and sufficient rates. In addition, we perform sensitivity analyses related to possible water rationing or growth not occurring as projected. These results will flow through to the revenue requirements and funding analysis to 110 determine potential impacts to revenues and 101- overall revenue stability. X000 This histogram visually communicates usage patterns and potential conservation reductions due to changes in rate structure. Usage thresholds can be overlaid to illustrate how pricing and demands converge. 1 VAC1ient23\Hrcadia \Rate Structures \lndd \Sec05- WorkPlan.indd To justify the potential the development of budget based rates, we will also develop consumption profiles that illustrate usage patterns by potential customer classes and at various water allotments (tiers). In addition, we will examine the data to identify potential outliers that have unique consumption profiles. This data will be used to create corresponding sewer rates that match changes to the water rates. The illustration below shows a sample histogram that would be developed for a customer class to explore consumption patterns and potential creation of tier break - points. Finally, Carollo will evaluate and update customer class specific price elasticity factors that take into account broader industry experience, but that are tailored to the City based on historical customer usage, demographics, future demand projections, and property attributes and irrigation requirements. Task 4: Rate Design Analysis The City has determine that the best overall structure to meet the City's goals. However, the design and implementation of the overall rate is still undetermined. As such, the proposed budget based rates structures will be evaluated and designed to generate sufficient revenues while meeting the City's key study objectives. We will meet with City staff to review and evaluate potential rate structure alternatives that promote an equitable allocation of costs among customer groups. Based on our past experience with comparable water and sewer agencies, we will guide the City through this review to identify key features likely to promote policy objectives while retaining equitable cost recovery. Carollo will develop a matrix that outlines: Advantages and disadvantages of each rate structure alternative. Shoe Family Billing Ham ..:59'9A Z9% 92X1111:: 7::.°:x1111 a: 32 Se 0Z 9 r a a: 1111 a ai S2 WORK PLAN a i r r r r r r r r r r r r r r r r r r' r' r' EXHIBIT "A" - ATTACHMENT • Nexus between each rate structure and system costs and overall equity between customer classes. • Effect of rate structures on revenue stability. • Ability and effectiveness of rate structures to meet the City's policy objectives. • Administrative ease. • Potential for legal challenges. Carollo will also analyze a new rate structure to differentiate the impacts of commodity increase to the rate. For water, Carollo will analyze various rate structures including implementation of three or more tiers. As the City has various sources of supply, these sources could be used to define a cost basis between tiers. Similarly, for sewer, Carollo will analyze potential changes to its rate structure to provide greater equity. The rate structures will be designed to comply with Proposition 218, AB 2882, and relevant case law — Palmdale Water District, Livingston, and San Juan Capistrano. For each proposed rate structure, the matrix will illustrate both qualitative and quantitative advantages, including achievement of policy objectives and revenue risk. This approach allows City staff to choose the rate structures that best meet its objectives and is critical in explaining the recommendations to the City Council. Task 5: Study Report A draft and final version of a summary report will be prepared to present the methodology, process, and findings of the rate study and its recommendations. This report will document the need for rate increases, multi-year revenue requirements, and the proposed structure to support the Proposition 218 process. Specifically, the report will contain elements and analyses regarding: the City's current rate structure; existing and recommended customer allocations; the potential of conservation and the potential impact to revenue sufficiency; the impact of potential drought rates; and a review of existing customer services fees and charges. Comments on the draft report will be incorporated into a final report. VAClient23\Nrcadia \Rate Structures \lndd \Sec05- WorkPlan.indd As part of developing the report, Carollo will conduct a survey of the rates charged by other comparable municipality water and sewer utilities in Contra Costa County. While the City's revenue and expenditures are unique, this exercise provides stakeholders with a mechanism for comparing similar services. Task 6: Meetings and Presentations Carollo will hold structured reviews with City staff during the course of the project. Carollo will also present the study findings to the City Council. For the purposes of this RFP it is assumed that Carollo will participate in three (3) working meetings with staff, inclusive of the study kick -off meeting, and conduct three (3) public presentations. With any potential rate structure change, it is critical that the City Council and staff fully understand the impacts to its ratepayers and the policy considerations used to develop the rates. Following approval of the proposed rates, Carollo will work with the City and legal counsel to draft a revised City ordinance. WORK PLAN Exhibit "B" SCHEDULE OF SERVICES The term of this Agreement shall be for one year from the date of execution, unless earlier terminated as provided herein. Consultant shall complete the services within the term of this Agreement, and shall meet any other established schedules and deadlines. ME Exhibit "C" COMPENSATION Compensation shall be based on time and materials spent in accordance with the tasks specified, not to exceed the total compensation listed: Professional Engineering Services - $89,905.00 Total Compensation $89,905.00 The total compensation shall not exceed the total listed without written authorization in accordance with Section 3.3.1 of this Agreement period. C -1