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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
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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:
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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
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(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
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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
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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
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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
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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
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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
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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.
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Output revenue requirement analysis
and pro forma for each scenario.
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WORK PLAN
1'
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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
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WORK PLAN a
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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