2014/07/08 City Council Resolution 2014-077RESOLUTION NO. 2014-077
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROHNERT PARK
AUTHORIZING AND APPROVING AN AGREEMENT WITH THE REED GROUP,
INC. FOR A COMPREHENSIVE WATER SERVICE CHARGE ANALYSIS
WHEREAS, the City of Rohnert Park provides water service to its customers in
exchange for payment for the cost of providing those services; and
WHEREAS, the costs to operate, maintain, and improve the water system along with
revenue from water service charge rates need to be evaluated periodically to ensure that the City
recovers the cost of these services; and
WHEREAS, the City of Rohnert Park last adjusted its water rates in 2008; and since that
time several conditions and circumstances have changed that affect the financial health of the
Water Enterprise; and
WHEREAS, an update of the City's existing financial model for the Water Enterprise
Fund is needed; and
WHEREAS, consistent with the City's Purchasing Policy Section 3.6.6(D), the Reed
Group, Inc. is qualified and able to perform this service and was selected on a sole source basis
due to their reasonable price for the analysis and familiarity with the City's Water Enterprise and
rate structure; and
NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Rohnert
Park authorizes and approves a professional services agreement with The Reed Group, Inc. for
water service charge analysis, for a not -to- exceed cost of $43,800 in substantially similar form
the agreement attached hereto as Exhibit A, which is incorporated by this reference, subject to
minor modification by the City Manager or City Attorney; and
BE IT FURTHER RESOLVED that the City Manager is hereby authorized and
directed to execute documents pertaining to same for and on behalf of the City of Rohnert Park.
DULY
ATTEST:
AND REGULARLY ADOPTED this 8"' day of July, 2014.
F ROHI R P
(-- osep . Callinan, Mayor
\J Anne M. Buergler, City
Attachments: Exhibit A — Agreement with two exhibits
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Exhibit A
City of Rohnert Park
Department of Public Works
600 Enterprise Drive
Rohnert Park, CA 94928
AGREEMENT FOR CONSULTANT SERVICES
This PROFESSIONAL SERVICES AGREEMENT is entered into as of the 8t1i, day of
July, 2014, by and between the CITY OF ROHNERT PARK ( "City "), a California municipal
corporation, and The Reed Group Inc. ( "Consultant ").
R ecital Is
WHEREAS, City desires to obtain consulting services for water charge analysis; and
WHEREAS, Consultant hereby warrants to City that Consultant is skilled and able to
provide such services described in Section 3 of this Agreement; and
WHEREAS, City desires to retain Consultant pursuant to this Agreement to provide the
services described in Section 3 of this Agreement.
Agreement
NOW, THEREFORE, in consideration of their mutual covenants, the parties hereto agree
as follows:
1. Incorporation of Recitals. The recitals set forth above, and all defined terms set
forth in such recitals and in the introductory paragraph preceding the recitals, are hereby
incorporated into this Agreement as if set forth herein in full.
2. Project Coordination.
A. City. The City Manager or his /her designee shall represent City
for all purposes under this Agreement. The Director of Public Works and Community Services
is hereby designated as the Project Manager. The Project Manager shall supervise the progress
and execution of this Agreement.
B. Consultant. The Consultant shall assign Robert Reed to have
overall responsibility for the progress and execution of this Agreement for Consultant.
Scope and Performance of Services
A. Scope of Services. Subject to such policy direction and approvals
as City may determine from time to time, Consultant shall perform the services set out in the
"Scope of Work" attached hereto as Exhibit A and incorporated herein by reference. Work for
specific projects shall be authorized separately by "Task Order."
1257802v I A 80078/0012
OAK #4844 - 6469 -8375 v 102
B. Time of Performance. The services of Consultant are to
commence upon receipt of a written notice to proceed from City, but in no event prior to
receiving a fully executed agreement from City and obtaining and delivering the required
insurance coverage, and satisfactory evidence thereof, to City. Consultant shall perform its
services in accordance with the schedule attached hereto as Exhibit A, and incorporated herein
by reference. Any changes to these dates in either this Section 3 or Exhibit A must be approved
in writing by the Project Manager.
C. Standard of Quality. City relies upon the professional ability of
Consultant as a material inducement to entering into this Agreement. All work performed by
Consultant under this Agreement shall be in accordance with all applicable legal requirements
and shall meet the standard of quality ordinarily to be expected of competent professionals in
Consultant's field of expertise.
4. Compensation and Method of Payment.
A. Compensation. The compensation to be paid to Consultant,
including both payment for professional services and reimbursable expenses, shall be at the rate
and schedules attached hereto as Exhibit A, and incorporated herein by reference. However, in
no event shall the amount City pays Consultant exceed Forty Three Thousand Eight Hundred
Dollars ($43,800). Payment by City under this Agreement shall not be deemed a waiver of
unsatisfactory work, even if such defects were known to the City at the time of payment. City
shall pay Consultant as compensation in full for such services and expenses for the different
elements of the scope of work as follows:
(1) For work pertaining to water service charge analysis (see
Exhibit A) the hourly rate for said service is at Consultant's
standard hourly rates not to exceed $250 per hour.
(2) Any changes to Consultants standard hourly rates must be
provided to and approved by the City thirty (30) days prior to such
rates taking effect. In no event shall such proposed rate
adjustments exceed a year- one -year increase of five percent (5 %).
B. Timing of Payment.
Progress payments will be tied to completion of tasks so that all
payments are proportional to the work completed. A copy of the
progress payment schedule is attached to the rate and schedules set
forth in Exhibit A.
(1) Payments due and payable to Consultant for current services must
be within the current budget and within an available, unexhausted
and unencumbered appropriation of the City. In the event the City
has not appropriated sufficient funds for payment of Consultant
services beyond the current fiscal year, this Agreement shall cover
only those costs incurred up to the conclusion of the current fiscal
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year; payment for additional work is conditional upon future City
appropriation.
C. Changes in Compensation. Consultant will not undertake any
work that will incur costs in excess of the amount set forth in Section 4(A) without prior written
amendment to this Agreement.
D. Taxes. Consultant shall pay all taxes, assessments and premiums
under the federal Social Security Act, any applicable unemployment insurance contributions,
Workers Compensation insurance premiums, sales taxes, use taxes, personal property taxes, or
other taxes or assessments now or hereafter in effect and payable by reason of or in connection
with the services to be performed by Consultant.
E. No Overtime or Premium Pay. Consultant shall receive no
premium or enhanced pay for work normally understood as overtime, i.e., hours that exceed forty
(40) hours per work week, or work performed during non - standard business hours, such as in the
evenings or on weekends. Consultant shall not receive a premium or enhanced pay for work
performed on a recognized holiday. Consultant shall not receive paid time off for days not
worked, whether it be in the form of sick leave, administrative leave, or for any other form of
absence.
F. Litigation Support. Consultant agrees to testify at City's request if
litigation is brought against City in connection with Consultant's work product. Unless the
action is brought by Consultant or is based upon Consultant's negligence, City will compensate
Consultant for the preparation and the testimony at Consultant's standard hourly rates, if
requested by City and not part of the litigation brought by City against Consultant.
5. Amendment to Scope of Work. City shall have the right to amend the Scope of
Work within the Agreement by written notification to the Consultant. In such event, the
compensation and time of performance shall be subject to renegotiation upon written demand of
either party to the Agreement. Consultant shall not commence any work exceeding the Scope of
Work without prior written authorization from the City. Failure of the Consultant to secure
City's written authorization for extra or changed work shall constitute a waiver of any and all
right to adjustment in the contract price or time due, whether by way of compensation,
restitution, quantum merit, etc. for work done without the appropriate City authorization.
6. Term. The term of this Agreement shall commence on the date of its execution
by both parties and shall continue in full force and effect until January 30, 2015 unless earlier
terminated in accordance with Section 18. Notwithstanding the foregoing, this Agreement may
be extended for successive one -year term(s) upon mutual, written approval by the City Manager
or his /her designee and Consultant. Work authorized by a separate Task Order as contemplated
by this Agreement shall be performed in accordance with the schedule set forth in the Task
Order.
7. Inspection. Consultant shall furnish City with every reasonable opportunity for
City to ascertain that the services of Consultant are being performed in accordance with the
requirements and intentions of this Agreement. All work done and all materials furnished, if
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any, shall be subject to the Project Manager's inspection and approval. The inspection of such
work shall not relieve Consultant of any of its obligations to fulfill the Agreement as prescribed.
8. Ownership of Documents. Title to all plans, specifications, maps, estimates,
reports, manuscripts, drawings, descriptions and other final work products compiled by the
Consultant under the Agreement shall be vested in City, none of which shall be used in any
manner whatsoever, by any person, firm, corporation, or agency without the expressed written
consent of the City. Basic survey notes and sketches, charts, computations, and other data
prepared or obtained under the Agreement shall be made available, upon request, to City without
restriction or limitations on their use. Consultant may retain copies of the above - described
information but agrees not to disclose or discuss any information gathered, discussed or
generated in any way through this Agreement without the written permission of City during the
term of this Agreement, unless required by law.
9. Employment of Other Consultants Specialists or Experts. Consultant will not
employ or otherwise incur an obligation to pay other consultants, specialists or experts for
services in connection with this Agreement without the prior written approval of the City.
10. Conflict of Interest.
A. Consultant covenants and represents that neither it, nor any officer
or principal of its firm, has, or shall acquire any investment, income, business entity, interest in
real property, or other interest, directly or indirectly, which would conflict in any manner with
the interests of City, hinder Consultant's performance of services under this Agreement, or be
affected in any manner or degree by performance of Consultant's services hereunder. Consultant
further covenants that in the performance of the Agreement, no person having any such interest
shall be employed by it as an officer, employee, agent, or subcontractor without the express
written consent of the City. Consultant agrees at all times to avoid conflicts of interest, or the
appearance of any conflicts of interest, with the interests of the City in the performance of the
Agreement.
B. Consultant is not a designated employee within the meaning of the
Political Reform Act because Consultant:
(1) will conduct research and arrive at conclusions with respect to its
rendition of information, advice, recommendation, or counsel
independent of the control and direction of the City or of any City
official, other than normal contract monitoring; and
(2) possesses no authority with respect to any City decision beyond the
rendition of information, advice, recommendation, or counsel.
(2 Cal. Code Regs. § 18700(a)(2).)
11. Liability of Members and Employees of City. No member of the City and no
other officer, elected official, employee or agent of the City shall be personally liable to
Consultant or otherwise in the event of any default or breach of the City, or for any amount
which may become due to Consultant or any successor in interest, or for any obligations directly
or indirectly incurred under the terms of this Agreement.
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12. Indemnity. To the fullest extent permitted by law, Consultant hereby agrees to
defend (by counsel reasonably satisfactory to the City), indemnify, and hold harmless the City,
its officers, elected officials, employees, agents, and volunteers from and against any and all
claims, demands, damages, costs, liabilities, or obligations brought on account of or arising out
of any acts, errors, or omissions of Consultant, its officers, employees, agents, and
subcontractors undertaken pursuant to this Agreement excepting liabilities due to the sole
negligence or willful misconduct of City. The City has no liability or responsibility for any
accident, loss, or damage to any work performed under this Agreement whether prior to its
completion and acceptance or otherwise. Consultant's duty to indemnify and hold harmless, as
set forth herein, shall include the duty to defend as set forth in California Civil Code § 2778.
This indemnification obligation is not limited in any way by any limitation on the amount or type
of damages or compensation payable by or for Consultant under Worker's Compensation,
disability or other employee benefit acts or the terms, applicability or limitations of any
insurance held or provided by Consultant and shall continue to bind the parties after
termination /completion of this agreement. This indemnification shall be regardless of and not in
any way limited by the insurance requirements of this contract. This indemnification is for the
full period of time allowed by law and shall survive the termination of this agreement.
13. Independent Contractor. It is expressly agreed that Consultant, in the
performance of the work and services agreed to be performed by Consultant, shall act as and be
an independent contractor and not an agent or employee of City; and as an independent
contractor, Consultant shall obtain no rights to retirement benefits or other benefits which accrue
to City's employees, and Consultant hereby expressly waives any claim it may have to any such
rights. Consultant, its officers, employees and agents shall not have any power to bind or
commit the City to any decision.
14. Compliance with Laws.
A. General. Consultant shall use the standard of care in its profession
to comply with all applicable federal, state, and local laws, codes, ordinances, and regulations.
Consultant represents and warrants to City that it has and shall, at its sole cost and expense, keep
in effect or obtain at all times during the term of this Agreement any licenses, permits, insurance
and approvals which are legally required for Consultant to practice its profession. Consultant
shall maintain a City business license. City is not responsible or liable for Consultant's failure to
comply with any or all of the requirements contained in this paragraph.
B. Workers' Compensation. Consultant certifies that it is aware of the
provisions of the California Labor Code which require every employee to be insured against
liability for workers' compensation or to undertake self - insurance in accordance with the
provisions of that Code, and Consultant certifies that it will comply with such provisions before
commencing performance of the Agreement and at all times in the performance of the
Agreement.
C. Prevailing Wage. Consultant and Consultant's subconsultants (if
any) shall, to the extent required by the California Labor Code, pay not less than the latest
prevailing wage rates to workers and professionals as determined by the Director of Industrial
Relations of the State of California pursuant to California Labor Code, Part 7, Chapter 1,
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Article 2. Copies of the applicable wage determination are on file at the City's office of the City
Clerk.
D. Injury and Illness Prevention Program. Consultant certifies that it
is aware of and has complied with the provisions of California Labor Code § 6401.7, which
requires every employer to adopt a written injury and illness prevention program.
E. City Not Responsible. City is not responsible or liable for
Consultant's failure to comply with any and all of its requirements under this section and
Agreement.
F. Business Licenses. Except as otherwise allowed by City in its sole
discretion, Consultant and all subconsultants shall have acquired, at their expense, a business
license from the City in accordance with Chapter 5.04 of the Rohnert Park Municipal Code, prior
to City's issuance of an authorization to proceed with the Services. Such license(s) must be kept
valid throughout the term of this Agreement.
G. Waiver of Subrogation. Consultant and Consultant's insurance
company agree to waive all rights of subrogation against City, its officers, elected officials,
employees, agents and volunteers for losses paid under Consultant's workers' compensation
insurance policy which arise from the work performed by Consultant for City.
15. Confidential Information. All data, documents, discussions or other information
developed or received by or for Consultant in performance of this Agreement are confidential
and not to be disclosed to any person except as authorized by City, or as required by law.
16. Assignment;. Subcontractors; Employees
A. Assignment. Consultant shall not assign, delegate, transfer, or
convey its duties, responsibilities, or interests in this Agreement or any right, title, obligation, or
interest in or to the same or any part thereof without the City's prior written consent. Any
assignment without such approval shall be void and, at the City's option, shall immediately cause
this Agreement to terminate.
B. Subcontractors; Employees. Consultant shall be responsible for
employing or engaging all persons necessary to perform the services of Consultant hereunder.
No subcontractor of Consultant shall be recognized by the City as such; rather, all subcontractors
are deemed to be employees of the Consultant, and Consultant agrees to be responsible for their
performance. Consultant shall give its personal attention to the fulfillment of the provisions of
this Agreement by all of its employees and subcontractors, if any, and shall keep the work under
its control. If any employee or subcontractor of Consultant fails or refuses to carry out the
provisions of this Agreement or appears to be incompetent or to act in a disorderly or improper
manner, it shall be discharged immediately from the work under this Agreement on demand of
the Project Manager.
17. Insurance. Without limiting Consultant's indemnification provided herein,
Consultant shall comply with the requirements set forth in Exhibit C to this Agreement.
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18. Termination of Agreement, Default.
A. This Agreement and all obligations hereunder may be terminated
at any time, with or without cause, by the City upon 5 days' written notice to Consultant.
B. If Consultant fails to perform any of its obligations under this
Agreement within the time and in the manner herein provided or otherwise violates any of the
terms of this Agreement, in addition to all other remedies provided by law, City may terminate
this Agreement immediately upon written notice. In such event, Consultant shall be entitled to
receive as full payment for all services satisfactorily rendered and expenses incurred hereunder,
an amount which bears the same ratio to the total fees specified in the Agreement as the services
satisfactorily rendered hereunder by Consultant bear to the total services otherwise required to be
performed for such total fee; provided, however, that the City shall deduct from such amount the
amount of damages, if any, sustained by City by virtue of the breach of the Agreement by
consultant.
C. In the event this Agreement is terminated by City without cause,
Consultant shall be entitled to any compensation owing to it hereunder up to the time of such
termination, it being understood that any payments are full compensation for services rendered
prior to the time of payment.
D. Upon termination of this Agreement with or without cause,
Consultant shall turn over to the City Manager immediately any and all copies of studies,
sketches, drawings, computations, and other data, whether or not completed, prepared by
Consultant or its subcontractors, if any, or given to Consultant or its subcontractors, if any, in
connection with this Agreement. Such materials shall become the permanent property of the
City. Consultant, however, shall not be liable for the City's use of incomplete materials nor for
the City's use of complete documents if used for other than the project contemplated by this
Agreement.
19. Suspension. The City shall have the authority to suspend this Agreement and the
services contemplated herein, wholly or in part, for such period as it deems necessary due to
unfavorable conditions or to the failure on the part of the Consultant to perform any provision of
this Agreement. Consultant will be paid for satisfactory services performed through the date of
temporary suspension.
20. Merger; Amendment. This Agreement constitutes the complete and exclusive
statement of the agreement between City and Consultant and shall supersede all prior
negotiations, representations, or agreements, either written or oral. This document may be
amended only by written instrument, signed by both the City and Consultant. All provisions of
this Agreement are expressly made conditions.
21. Interpretation. This Agreement shall be interpreted as though it was a product of
a joint drafting effort and no provisions shall be interpreted against a party on the ground that
said party was solely or primarily responsible for drafting the language to be interpreted.
22. Litigation Costs. If either party becomes involved in litigation arising out of this
Agreement or the performance thereof, the court in such litigation shall award reasonable costs
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and expenses, including attorneys' fees, to the prevailing party. In awarding attorneys' fees, the
court will not be bound by any court fee schedule, but shall, if it is in the interest of justice to do
so, award the full amount of costs, expenses, and attorneys' fees paid or incurred in good faith.
23. Time of the Essence. Time is of the essence of this Agreement.
24. Written Notification. Any notice, demand, request, consent, approval or
communication that either party desires or is required to give to the other party shall be in
writing and either served personally or sent by prepaid, first class mail. Any such notice,
demand, etc. shall be addressed to the other party at the address set forth below. Either party
may change its address by notifying the other party of the change of address. Notice shall be
deemed communicated within 72 hours from the time of mailing if mailed as provided in this
section.
If to City: Director of Public Works and Community Services
Department of Public Works
600 Enterprise Drive
Rohnert Park, CA 94928
If to Consultant: The Reed Group Inc.
Robert Reed
3053 Freeport Boulevard 4158
Sacramento, CA 95818 -4346
25. Consultant's Books and Records.
A. Consultant shall maintain any and all ledgers, books of account,
invoices, vouchers, canceled checks, and other records or documents evidencing or relating to
charges for services, or expenditures and disbursements charged to City and all documents and
records which demonstrate performance under this Agreement for a minimum period of three (3)
years, or for any longer period required by law, from the date of termination or completion of
this Agreement.
B. Any records or documents required to be maintained pursuant to
this Agreement shall be made available for inspection or audit, at any time during regular
business hours, upon written request by the City Attorney, City Auditor, City Manager, or a
designated representative of any of these officers. Copies of such documents shall be provided
to City for inspection when it is practical to do so. Otherwise, unless an alternative is mutually
agreed upon, the records shall be available at Consultant's address indicated for receipt of notices
in this Agreement.
C. The City may, by written request by any of the above -named
officers, require that custody of the records be given to the City and that the records and
documents be maintained in the City Manager's office.
26. Agreement Binding. The terms, covenants, and conditions of this Agreement
shall apply to, and shall bind, the heirs, successors, executors, administrators, assigns, and
subcontractors of both parties.
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27. Equal Employment Opportunity. Consultant is an equal opportunity employer
and agrees to comply with all applicable state and federal regulations governing equal
employment opportunity. Consultant will not discriminate against any employee or applicant for
employment because of race, religion, age, sex, creed, color, sexual orientation, marital status or
national origin. Consultant will take affirmative action to ensure that applicants are treated
during such employment without regard to race, religion, age, sex, creed, color, sexual
orientation, marital status, or national origin. Such action shall include, but shall not be limited
to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment
advertising; lay -offs or termination; rates of pay or other forms of compensation; and selection
for training, including apprenticeship. Consultant further agrees to post in conspicuous places,
available to employees and applicants for employment, notices setting forth the provisions of this
nondiscrimination clause.
28. City Not Obligated to Third Parties. The City shall not be obligated or liable for
payment hereunder to any party other than Consultant.
29. Waiver. No failure on the part of either party to exercise any right or remedy
hereunder shall operate as a waiver of any other right or remedy that such party may have
hereunder.
30. Severability. If any one or more of the provisions contained herein shall for any
reason be held to be invalid, illegal or unenforceable in any respect, then such provision or
provisions shall be deemed severable from the remaining provisions hereof, and such invalidity,
illegality, or unenforceability shall not affect any other provision hereof, and this Agreement
shall be construed as if such invalid, illegal, or unenforceable provision had not been contained
herein.
31. Exhibits. The following exhibits are attached to this Agreement and incorporated
herein by this reference:
A. Exhibit A: Scope of Work, Cost and Project Schedule
B. Exhibit B: Insurance Requirements
32. Execution. This Agreement may be executed in several counterparts, each of
which shall constitute one and the same instrument and shall become binding upon the parties
when at least one copy hereof shall have been signed by both parties hereto. In approving this
Agreement, it shall not be necessary to produce or account for more than one such counterpart.
33. News Releases /Interviews. All Consultant and subconsultant news releases,
media interviews, testimony at hearings and public comment shall be prohibited unless expressly
authorized by City.
34. Applicable Law; Venue. This Agreement shall be construed and interpreted
according to California law. In the event that suit shall be brought by either party hereunder, the
parties agree that a trial of such action shall be held exclusively in a state court in the County of
Sonoma, California.
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35. Authority. Each individual executing this Agreement on behalf of one of the
parties represents that he or she is duly authorized to sign and deliver the Agreement on behalf of
such party and that this Agreement is binding on such party in accordance with its terms.
36. STATEMENT OF ECONOMIC INTEREST. If City determines Consultant
comes within the definition of Consultant under the Political Reform Act (Government Code
§87100), Consultant shall complete and file and shall require any other person doing work under
this Agreement to complete and file a "Statement of Economic Interest" with the Clerk of the
City of Rohnert Park disclosing Consultant and /or such other person's financial interests.
IN WITNESS WHEREOF, City and Consultant have executed this Agreement as of the date first
above written.
CITY OF ROHNERT PARK
By:
City Manager
Date:
Per Resolution No. 2014- adopted by the Rohnert
Park City Council at its meeting of , 2014.
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
City Attorney
CONSULTANT
By:
Robert Reed,
Title:
Date:
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The Reed Group, Inc
EXHIBIT A
Scope of Work and Cost and Schedule
Exhibit A
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OAK 44844 - 6469 -8375 v 102
Exhibit A to the Agreement
June 11, 2014
John McArthur
City of Rohnert Park
130 Avram Avenue
Rohnert Park, CA 94928
Subject: Proposal to Prepare Water Rate Study
Dear John,
In response to your request, The Reed Group, Inc. is pleased to offer assistance to the City of
Rohnert Park in preparing a water rate study. This proposal letter includes a scope of services,
schedule, and cost estimate for the study based on our recent telephone conversation. As you
know, The Reed Group, Inc. completed a sewer rate study in 2011, which helped the City
resolve contentious issues around the rates and return theirs to an appropriate level following a
rate - rollback forced upon the City through the initiative process. We plan to bring the same
level of professionalism and expertise to the water rate study.
The study described herein includes the technical and financial analysis for preparing a multi-
year financial plan for the water utility, as well as examining rate structure issues and
developing rate structure recommendations consistent with the City's objectives. The study
also includes (1) a workshop with the City Council early in the study, (2) a presentation to the
City Council prior to the Proposition 218 notification process, and (3) a presentation during a
public hearing to consider proposed water rates. If necessary, the study scope and schedule
could be modified to accommodate the needs of the City.
Scope of Services
The City of Rohnert Park last adjusted its water rates in 2008. A review of the financial
condition of the water utility and an update of the water rates is due. Water rates must generate
sufficient revenues to meet the utility's operation and maintenance needs, debt service
obligations, and capital program needs with consideration for other revenue sources and
financial reserves and reserve policies. To help ensure that financial obligations are met the rate
study will include development of a multi -year financial plan (similar to the plan prepared for
the sewer utility). The financial plan will reflect estimated long -term rehabilitation and
replacement needs of the water system.
The water rate study will also include a review of the current water rate structure and the
development of recommendations consistent with rate setting objectives. One objective is that
3053 Freeport Boulevard #158 • Sacramento, CA 95818 -4346 • (916) 444 -9622 • www.TheReedGroup.org
JOHN MCARTHUR
JUNE 11, 2014
PAGE 2
the water rates must meet the requirements of the California Urban Water Conservation
Council's (CUWCC) Best Management Practice (BMP) 1.4. Complying with this BMP may
affect the portion of water rate revenues generated from fixed service charges versus water
usage charges. In addition, the City may want to establish appropriate rates for water shortage
conditions and may also create a mechanism for adjusting water rates commensurate with
changes in water supply costs from the Sonoma County Water Agency (SCWA). The water rate
study will also need to be sensitive to the concerns of the community.
Specific tasks for the study include:
Project Initiation and Management - Includes kick -off meeting and up to 3 interim
meetings with staff, contract administration, and coordination and communication with
the City. In particular, we will use the kick -off meeting to review project scope, overall
schedule, and initial data and information needs. Prior to the kick -off meeting, we will
submit an information request listing the documents and information that will be
needed for the study. During the kick -off meeting, we will review the request, and also
begin planning for the workshop to be held with the City Council.
Develop Multi -Year Financial Plan - Prepare a multi -year financial plan with a planning
horizon consistent with the City's capital improvement plan. The financial plan will
include consideration of annual operating and maintenance costs, current and potential
future debt service obligations, capital improvement needs, prudent reserves, and
revenues to the water utility. The financial plan will be used to (1) develop a financial
strategy for meeting long -term rehabilitation and replacement needs of the utility, and
(2) identify the annual water rate revenues requirement. The financial strategy may
include consideration of debt financing of capital projects and, if necessary, estimation of
the size and timing of debt issuance. We will also consider how reserve policies might
help to reduce the need for future debt as well as moderate annual rate adjustments.
The revenue requirement is the amount needed to meet financial obligations and goals
with consideration of reserves and reserve policies.
Initial Workshop with City Council - Following development of a preliminary financial
plan, we propose to conduct a workshop with the City Council. The workshop will
provide an opportunity for discussing the water utility in the context of (1) current
financial situation, (2) financial needs within the planning period, (3) reserves and
reserve policies, (4) observations related to the current water rates and rate structures,
(5) potential rate setting objectives and concepts for alternative rate structures, (6) water
shortage and water shortage rate issues, (7) BMP 1.4 compliance options, (8) potential
mechanisms for automatic water rate adjustments, and (9) any other issues of interest to
the Council and community. The workshop will provide an opportunity to inform the
Council about issues that could be addressed and identify possible solutions to those
issues. This workshop will provide the Council with an opportunity to provide
direction on the scope and breadth of the study.
JOHN MCARTHUR
JUNE 11, 2014
PAGE
Cost of Service Analysis and Rate Design - This task will include cost of service analyses
and design of water rates. We will follow the requirements of Proposition 218 in
determining water rates and in allocating costs to each customer. Rate setting principles
promulgated by the American Water Works Association will be followed. In addition to
evaluating the current rate structures, we will develop alternative rate structures based
on rate setting objectives developed in consultation with City staff and /or the City
Council. Encouraging water conservation (in compliance with BMP 1.4) is an example
of an objective that could be used to help guide the rate design process. However, there
are different ways to meet this requirement. Revenue stability is another objective that
can (but need not) conflict with the water conservation objective. Rate analyses will be
consistent with meeting the revenue needs identified through the financial plan.
Automatic Water Rate Adjustment Mechanism - If the City Council expresses interest in the
potential mechanisms for automatic water rate adjustments, this task will be performed.
Rate study recommendations can also include development of a mechanism for
automatic adjustment of water rates based on changes in water charges from the SCWA,
as well as the potential for automatic future adjustments for inflation'. Such a
mechanism could help the City avoid some of the time and expense of formal rate
approval processes.
Water Shortage Financial Analysis - If the City Council expresses interest in developing
financial strategies for addressing water shortage conditions, this task will be
performed. With 2014 shaping up to be a dry year (on the heels of a very dry year), this
task would examine the financial implications of various potential stages of water
shortage. This will include an assessment of the potential impact to both revenues and
expenses of reduced water sales, as well as the development of strategies to counter the
effects of the financial deficits created at various stages of shortage. Strategies will
include consideration of (1) increased use of available reserves, (2) potential deferral of
capital projects, and (3) implementation of water shortage rates (drought surcharges). A
balanced approach can help mitigate adverse impacts in any one area.
Water Shortage Rates - If the preceding task is performed, this task will also be included.
Water shortage rates may include temporary rate surcharges and /or excess use charges
to (1) provide increased incentives to customers for meeting water use reduction goals,
and (2) help offset the financial deficit created by reduced water sales.
Recommendations will be developed for each stage of potential water shortage, and will
be expressed in a way that they could be implemented whenever a shortage is declared
(in 2014 and /or in future years). The results of this and the prior task could be
incorporated into the City's water shortage contingency planning. Water shortage rates
will be developed such that they could be implemented either in the current shortage, or
adopted now and implemented in a future water shortage.
' These types of automatic adjustments were authorized by statute in 2008.
JOHN MCARTHUR
JUNE 11, 2014
PAGE
Prepare and Present Draft Rate Study Report - Draft recommendations on the financial plan
and water rates will be documented in a draft report including all underlying
assumptions, proposed financial strategy, rate structure, water shortage strategy, and
policy recommendations. Draft recommendations will be presented to the City Council
during a regular council meeting or in a workshop setting. This will provide an
opportunity to describe how each of the key issues identified for this project were
addressed and resolved, as well as provide an opportunity to address public comments
and questions before the formal rate adoption process begins.
• Finalize Rate Study and Recommendations - Based on comments and direction received
from staff and the City Council financial and rate analyses will be refined, as necessary,
and study recommendations finalized. We will also work with City staff to prepare
required public hearing notices in compliance with Proposition 218. This notice must be
mailed to all customers/ property owners at least 45 days prior to a public hearing.
Presentation and Rate Hearing - The Reed Group, Inc. will present final study
recommendations to the City Council during a public hearing to consider the rates for
adoption.
Cost and Schedule
It is estimated that water financial plan and rate study can be performed for $43,800, including
expenses, as detailed in the table below. It is our practice to bill clients monthly for actual time
and expenses, subject to the not -to- exceed limit of the study. Payments are due within 30 days.
My hourly billing rate for 2014 is $250, and is subject to change each January. Expenses are
estimated at about $800 (primarily for travel). The scope of services assumes up to 4 meetings
with staff and up to 3 workshops/ presentations to the City Council.
All work products will be submitted in electronic format (primarily PDF files). We would be
pleased to provide bound copies of final work products upon request, for the cost of
production.
An initial time line for the project is listed below, assuming that the study begins by mid -July,
2014. The timeline will be reviewed and, if necessary, adjusted during the kick -off meeting for
the project. The proposed timeline would enable the City to adopt new water rates in January
2015.
Data request and kick -off meeting
Initial financial plan analyses
Initial Workshop with City Council
Cost of Service Analysis and Rate Design
Automatic Adjustment Mechanism
Late July
August
Late August
Late August - Early Sept.
Early September
City of Rohnert Park
Water Rate Study
Cost Estimate
JOHN MCARTHUR
JUNE 11, 2014
PAGE 5
Task
Hours
Fees
Hourly rate - ->
$ 250
1. Project Initiation and Management
20
$
5,000
2. Develop Multi -Year Financial Plan
32
$
8,000
3. Workshop with City Council
10
$
2,500
4. Cost of Service Analysis and Rate Design
16
$
4,000
5. Automatic Water Rate Adjustment Mechanism
8
$
2,000
6. Water Shortage Financial Analysis
12
$
3,000
7. Water Shortage Rates
8
$
2,000
8. Prepare and Present Draft Rate Study
48
$
12,000
9. Finalize Rate Study and Recommendations
8
$
2,000
10. Presentation and Rate Hearing
10
$
2,500
Total Hours and Fees
172
$
43,000
Expenses
$
800
Total Project Costs
$
43,800
Water Shortage Analysis and Rates Early September
Draft Report & Presentation to City Council Early October
Finalize Report & Mail Notice of Public Hearings Early November
Public Hearing on Water Rates Early January
The schedule for the water rate study can be adjusted to meet the City's needs. We will work
closely with City staff to ensure that the City's needs are addressed throughout the study.
Please let me know if you have any questions regarding this proposal. We appreciated the
opportunity to once again be of service to the City of Rohnert Park.
Sincerely,
Robert Reed
The Reed Group, Inc.
EXHIBIT B
INSURANCE REQUIREMENTS for Consultant Services Agreement
Prior to the beginning of and throughout the duration of the Work, Consultant will maintain insurance in
conformance with the requirements set forth below. Consultant will use existing coverage to comply with
these requirements. If that existing coverage does not meet the requirements set forth here, Consultant
agrees to amend, supplement or endorse the existing coverage to do so. Consultant acknowledges that the
insurance coverage and policy limits set forth in this section constitute the minimum amount of coverage
required. Any insurance proceeds available to City in excess of the limits and coverage required in this
agreement and which is applicable to a given loss, will be available to City.
Consultant shall provide the following types and amounts of insurance:
General Liability Insurance using Insurance Services Office "Commercial General Liability" policy form
CG 00 01 or the exact equivalent. Defense costs must be paid in addition to limits. There shall be no cross
liability exclusion for claims or suits by one insured against another. Limits are subject to review but in
no event less than $2,000,000 (Two Million Dollars) per occurrence.
Business Auto Coverage on ISO Business Auto Coverage form CA 0001 including symbol 1 (Any Auto)
or the exact equivalent. Limits are subject to review, but in no event to be less than $2,000,000 (Two
Million Dollars) per accident. If Consultant owns no vehicles, this requirement may be satisfied by a non -
owned auto endorsement to the general liability policy described above. If Consultant or Consultant's
employees will use personal autos in any way on this project, Consultant shall provide evidence of
personal auto liability coverage for each such person.
Workers Compensation on a state- approved policy form providing statutory benefits as required by law
with employer's liability limits no less than $1,000,000 (One Million Dollars) per accident or disease.
Excess or Umbrella Liability Insurance (Over Primary) if used to meet limit requirements, shall provide
coverage at least as broad as specified for the underlying coverages. Any such coverage provided under
an umbrella liability policy shall include a drop down provision providing primary coverage above a
maximum $25,000 self - insured retention for liability not covered by primary but covered by the umbrella.
Coverage shall be provided on a "pay on behalf' basis, with defense costs payable in addition to policy
limits. Policy shall contain a provision obligating insurer at the time insured's liability is determined, not
requiring actual payment by the insured first. There shall be no cross liability exclusion precluding
coverage for claims or suits by one insured against another. Coverage shall be applicable to City for
injury to employees of Consultant, subconsultants or others involved in the Work. The scope of coverage
provided is subject to approval of City following receipt of proof of insurance as required herein. Limits
are subject to review but in no event less than $2,000,000 (Two Million Dollars) per occurrence.
Professional Liability or Errors and Omissions Insurance as appropriate shall be written on a policy form
coverage specifically designed to protect against acts, errors or omissions of the consultant and "Covered
Professional Services" as designated in the policy must specifically include work performed under this
agreement. The policy limit shall be no less than $2,000,000 (Two Million Dollars) per claim and in the
aggregate. The policy must "pay on behalf of the insured and must include a provision establishing the
insurer's duty to defend. The policy retroactive date shall be on or before the effective date of this
agreement.
Exhibit B
Insurance procuredpursuant to these requirements shall be written by insurers that are admitted carriers
in the state of California and with an AM Best's rating of A- or better and a ininimum f nancial size VII.
General conditions pertaining to provision of insurance coverage by Consultant. Consultant and City
agree to the following with respect to insurance provided by Consultant.
1. Consultant agrees to have its insurer endorse the third party general liability coverage required
herein to include as additional insureds the City, its officers, elected officials, employees, agents,
and volunteers using standard ISO endorsement No. CG 20 10 or an approved equivalent. If
completed operations coverage is excluded, the policy must be endorsed to include such coverage.
Consultant also agrees to require all contractors, and subcontractors to do likewise.
2. No liability insurance coverage provided to comply with this Agreement shall prohibit Consultant,
or Consultant's employees, or agents, from waiving the right of subrogation prior to a loss.
Consultant agrees to waive subrogation rights against City regardless of the applicability of any
insurance proceeds, and to require all contractors and subcontractors to do likewise.
3. The worker's compensation policy is to be endorsed with a waiver of subrogation. The insurance
company, in its endorsement, agrees to waive all rights of subrogation against the City, its officers,
elected officials, employees, agents, and volunteers for losses paid under the terms of this policy
which arise from the work performed by the named insured for the City.
4. All insurance coverage and limits provided by Consutlant and available or applicable to this
agreement are intended to apply to the full extent of the policies. Nothing contained in this
Agreement or any other agreement relating to the City or its operations limits the application of
such insurance coverage.
5. None of the coverages required herein will be in compliance with these requirements if they include
any limiting endorsement of any kind that has not been first submitted to City and approved of in
writing.
6. No liability policy shall contain any provision or definition that would serve to eliminate so- called
"third party action over" claims, including any exclusion for bodily injury to an employee of the
insured or of any contractor or subcontractor.
7. All coverage types and limits required are subject to approval, modification and additional
requirements by the City, as the need arises. Consultant shall not make any reductions in scope of
coverage (e.g. elimination of contractual liability or reduction of discovery period) that may
affect City's protection without City's prior written consent.
8. Proof of compliance with these insurance requirements, consisting of certificates of insurance
evidencing all of the coverages required and an additional insured endorsement to Consultant's
general liability policy, shall be delivered to City at or prior to the execution of this Agreement. In
the event such proof of any insurance is not delivered as required, or in the event such insurance is
canceled at any time and no replacement coverage is provided, City has the right, but not the duty,
to obtain any insurance it deems necessary to protect its interests under this or any other agreement
and to pay the premium. Any premium so paid by City shall be charged to and promptly paid by
Consultant or deducted from sums due Consultant, at City option.
Exhibit B
9. Certificate(s) are to reflect that the insurer will provide 30 days notice to City of any cancellation of
coverage. Consultant agrees to require its insurer to modify such certificates to delete any
exculpatory wording stating that failure of the insurer to mail written notice of cancellation imposes
no obligation, or that any party will "endeavor" (as opposed to being required) to comply with the
requirements of the certificate.
10. It is acknowledged by the parties of this agreement that all insurance coverage required to be
provided by Consultant or any subcontractor, is intended to apply first and on a primary,
noncontributing basis in relation to any other insurance or self insurance available to City.
11. Consultant agrees to ensure that subcontractors, and any other party involved with the project who
is brought onto or involved in the project by Consultant, provide the same minimum insurance
coverage required of Consultant. Consultant agrees to monitor and review all such coverage and
assumes all responsibility for ensuring that such coverage is provided in conformity with the
requirements of this section. Consultant agrees that upon request, all agreements with
subcontractors and others engaged in the project will be submitted to City for review.
12. Consultant agrees not to self - insure or to use any self - insured retentions or deductibles on any
portion of the insurance required herein and further agrees that it will not allow any contractor,
subcontractor, Architect, Engineer or other entity or person in any way involved in the performance
of work on the project contemplated by this agreement to self - insure its obligations to City. If
Consultant's existing coverage includes a deductible or self - insured retention, the deductible or self -
insured retention must be declared to the City. At that time the City shall review options with the
Consultant, which may include reduction or elimination of the deductible or self - insured retention,
substitution of other coverage, or other solutions.
13. The City reserves the right at any time during the term of the contract to change the amounts and
types of insurance required by giving the Consultant ninety (90) days advance written notice of
such change. If such change results in substantial additional cost to the Consultant, the City will
negotiate additional compensation proportional to the increased benefit to City.
14. For purposes of applying insurance coverage only, this Agreement will be deemed to have been
executed immediately upon any party hereto taking any steps that can be deemed to be in
furtherance of or towards performance of this Agreement.
15. Consultant acknowledges and agrees that any actual or alleged failure on the part of City to inform
Consultant of non - compliance with any insurance requirement in no way imposes any additional
obligations on City nor does it waive any rights hereunder in this or any other regard.
16. Consultant will renew the required coverage annually as long as City, or its employees or agents
face an exposure from operations of any type pursuant to this agreement. This obligation applies
whether or not the agreement is canceled or terminated for any reason. Termination of this
obligation is not effective until City executes a written statement to that effect.
17. Consultant shall provide proof that policies of insurance required herein expiring during the term of
this Agreement have been renewed or replaced with other policies providing at least the same
coverage. Proof that such coverage has been ordered shall be submitted prior to expiration. A
coverage binder or letter from Consultant's insurance agent to this effect is acceptable. A certificate
of insurance and /or additional insured endorsement as required in these specifications applicable to
Exhibit B
the renewing or new coverage must be provided to City within five days of the expiration of the
coverages.
18. The provisions of any workers' compensation or similar act will not limit the obligations of
Consultant under this agreement. Consultant expressly agrees not to use any statutory immunity
defenses under such laws with respect to City, its officers, elected officials, employees, agents, and
volunteers.
19. Requirements of specific coverage features or limits contained in this section are not intended as
limitations on coverage, limits or other requirements nor as a waiver of any coverage normally
provided by any given policy. Specific reference to a given coverage feature is for purposes of
clarification only as it pertains to a given issue, and is not intended by any party or insured to be
limiting or all- inclusive.
20. These insurance requirements are intended to be separate and distinct from any other provision in
this agreement and are intended by the parties here to be interpreted as such.
21. The requirements in this Section supersede all other sections and provisions of this Agreement to
the extent that any other section or provision conflicts with or impairs the provisions of this Section.
22. Consultant agrees to be responsible for ensuring that no contract used by any party involved in any
way with the project reserves the right to charge City or Consultant for the cost of additional
insurance coverage required by this agreement. Any such provisions are to be deleted with
reference to City. It is not the intent of City to reimburse any third party for the cost of complying
with these requirements. There shall be no recourse against City for payment of premiums or other
amounts with respect thereto.
23. Consultant agrees to provide immediate notice to City of any claim or loss against Consultant
arising out of the work performed under this agreement. City assumes no obligation or liability by
such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims
if they are likely to involve City.
Exhibit B
CERTIFICATE OF CONSULTANT
I HEREBY CERTIFY that I am the and a
duly authorized representative of the firm of
whose address is and that
neither I nor the above firm I here represent has:
a) Employed or retained for a commission, percentage, brokerage, contingent
fee, or other consideration, any firm or person (other than a bona fide
employee working solely for me or the above consultant) to solicit to
secure this Agreement.
b) Agreed, as an express or implied condition for obtaining this contract, to
employ or retain the services of any firm or person in connection with
carrying out the Agreement; or
C) Paid, or agreed to pay, to any firm, organization or person (other than a
bona fide employee working solely for me or the above consultant) any
fee, contribution, donation, or consideration of any kind for, or in
connection with, procuring or carrying out the Agreement;
Except as here expressly stated (if any);
I acknowledge that this certificate is subject to applicable State and Federal laws, both
criminal and civil.
Date
1257802v1A 80078/0012
OAK #4844 - 6469 -8375 v 102
Signature