HomeMy WebLinkAboutContract CAG-18-053
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AGREEMENT FOR 2018 COMPREHENSIVE RATE STUDY AND
RECOMMENDATION FOR SYSTEM DEVELOPMENT CHARGES
FOR WATER, WASTEWATER, AND SURFACE WATER UTILITIES
THIS AGREEMENT, dated March 7, 2018, is by and between the City of Renton (the "City"), a
Washington municipal corporation, and Harris & Associates, Inc. ("Consultant"), a California
corporation. The City and the Consultant are referred to collectively in this Agreement as the
"Parties."Once fully executed by the Parties,this Agreement is effective as of the last date signed
by both parties.
1. Scope of Work: Consultant agrees to provide consultant services as specified in Exhibit A,
which is attached and incorporated herein and may hereinafter be referred to as the
"Work."
2. Changes in Scope of Work: The City, without invalidating this Agreement, may order
changes to the Work consisting of additions,deletions or modifications.Any such changes
to the Work shall be ordered by the City in writing and the Compensation shall be
equitably adjusted consistent with the rates set forth in Exhibit B or as otherwise mutually
agreed by the Parties.
3. Time of Performance: Consultant shall commence performance of the Agreement
pursuant to the schedule(s)set forth in Exhibit C.All Work shall be performed by no later
than November 30, 2018.
4. Compensation:
A. Amount. Total compensation to Consultant for Work provided pursuant to this
Agreement shall not exceed $114,719, plus any applicable state and local sales taxes.
Compensation shall be paid based upon Work actually performed according to the
rate(s)or amounts specified in Exhibit B.The Consultant agrees that any hourly or flat
rate charged by it for its Work shall remain locked at the negotiated rate(s) unless
otherwise agreed to in writing or provided in Exhibit B. Except as specifically provided
herein, the Consultant shall be solely responsible for payment of any taxes imposed
as a result of the performance and payment of this Agreement.
B. Method of Payment. On a monthly or no less than quarterly basis during any quarter
in which Work is performed,the Consultant shall submit a voucher or invoice in a form
specified by the City, including a description of what Work has been performed, the
name of the personnel performing such Work, and any hourly labor charge rate for
such personnel. The Consultant shall also submit a final bill upon completion of all
Work. Payment shall be made by the City for Work performed within thirty (30)
calendar days after receipt and approval by the appropriate City representative of the
voucher or invoice. If the Consultant's performance does not meet the requirements
of this Agreement, the Consultant will correct or modify its performance to comply
with the Agreement.The City may withhold payment for work that does not meet the
requirements of this Agreement.
C. Effect of Payment. Payment for any part of the Work shall not constitute a waiver by
the City of any remedies it may have against the Consultant for failure of the
Consultant to perform the Work or for any breach of this Agreement by the
Consultant.
D. Non-Appropriation of Funds. If sufficient funds are not appropriated or allocated for
payment under this Agreement for any future fiscal period, the City shall not be
obligated to make payments for Work or amounts incurred after the end of the
current fiscal period, and this Agreement will terminate upon the completion of all
remaining Work for which funds are allocated. No penalty or expense shall accrue to
the City in the event this provision applies.
5. Termination:
A. The City reserves the right to terminate this Agreement at any time, with or without
cause by giving ten(10)calendar days' notice to the Consultant in writing. In the event
of such termination or suspension,all finished or unfinished documents,data,studies,
worksheets, models and reports, or other material prepared by the Consultant
pursuant to this Agreement shall be submitted to the City, if any are required as part
of the Work.
B. In the event this Agreement is terminated by the City,the Consultant shall be entitled
to payment for all hours worked to the effective date of termination, less all payments
previously made. If the Agreement is terminated by the City after partial performance
of Work for which the agreed compensation is a fixed fee, the City shall pay the
Consultant an equitable share of the fixed fee. This provision shall not prevent the
City from seeking any legal remedies it may have for the violation or nonperformance
of any of the provisions of this Agreement and such charges due to the City shall be
deducted from the final payment due the Consultant. No payment shall be made by
the City for any expenses incurred or work done following the effective date of
termination unless authorized in advance in writing by the City.
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6. Warranties And Right To Use Work Product: Consultant represents and warrants that
Consultant will perform all Work identified in this Agreement in a professional and
workmanlike manner and in accordance with all reasonable and professional standards
and laws. Compliance with professional standards includes, as applicable, performing the
Work in compliance with applicable City standards or guidelines (e.g. design criteria and
Standard Plans for Road, Bridge and Municipal Construction). Professional engineers shall
certify engineering plans, specifications, plats, and reports, as applicable, pursuant to
RCW 18.43.070. Consultant further represents and warrants that all final work product
created for and delivered to the City pursuant to this Agreement shall be the original work
of the Consultant and free from any intellectual property encumbrance which would
restrict the City from using the work product. Consultant grants to the City a non-
exclusive, perpetual right and license to use, reproduce, distribute, adapt, modify, and
display all final work product produced pursuant to this Agreement. The City's or other's
adaptation, modification or use of the final work products other than for the purposes of
this Agreement shall be without liability to the Consultant. The provisions of this section
shall survive the expiration or termination of this Agreement.
7. Record Maintenance: The Consultant shall maintain accounts and records, which
properly reflect all direct and indirect costs expended and Work provided in the
performance of this Agreement and retain such records for as long as may be required by
applicable Washington State records retention laws, but in any event no less than six
years after the termination of this Agreement. The Consultant agrees to provide access
to and copies of any records related to this Agreement as required by the City to audit
expenditures and charges and/or to comply with the Washington State Public Records Act
(Chapter 42.56 RCW). The provisions of this section shall survive the expiration or
termination of this Agreement.
8. Public Records Compliance: To the full extent the City determines necessary to comply
with the Washington State Public Records Act,Consultant shall make a due diligent search
of all records in its possession or control relating to this Agreement and the Work,
including, but not limited to, e-mail, correspondence, notes, saved telephone messages,
recordings, photos,or drawings and provide them to the City for production. In the event
Consultant believes said records need to be protected from disclosure, it may, at
Consultant's own expense, seek judicial protection. Consultant shall indemnify, defend,
and hold harmless the City for all costs, including attorneys' fees, attendant to any claim
or litigation related to a Public Records Act request for which Consultant has responsive
records and for which Consultant has withheld records or information contained therein,
or not provided them to the City in a timely manner. Consultant shall produce for
distribution any and all records responsive to the Public Records Act request in a timely
manner, unless those records are protected by court order.The provisions of this section
shall survive the expiration or termination of this Agreement.
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9. Independent Contractor Relationship:
A. The Consultant is retained by the City only for the purposes and to the extent set forth
in this Agreement.The nature of the relationship between the Consultant and the City
during the period of the Work shall be that of an independent contractor, not
employee.The Consultant,not the City,shall have the power to control and direct the
details, manner or means of Work. Specifically, but not by means of limitation, the
Consultant shall have no obligation to work any particular hours or particular
schedule, unless otherwise indicated in the Scope of Work or where scheduling of
attendance or performance is mutually arranged due to the nature of the Work.
Consultant shall retain the right to designate the means of performing the Work
covered by this agreement, and the Consultant shall be entitled to employ other
workers at such compensation and such other conditions as it may deem proper,
provided, however, that any contract so made by the Consultant is to be paid by it
alone, and that employing such workers, it is acting individually and not as an agent
for the City.
B. The City shall not be responsible for withholding or otherwise deducting federal
income tax or Social Security or contributing to the State Industrial Insurance
Program,or otherwise assuming the duties of an employer with respect to Consultant
or any employee of the Consultant.
C. If the Consultant is a sole proprietorship or if this Agreement is with an individual,the
Consultant agrees to notify the City and complete any required form if the Consultant
retired under a State of Washington retirement system and agrees to indemnify any
losses the City may sustain through the Consultant's failure to do so.
10. Hold Harmless: The Consultant agrees to release, indemnify, defend, and hold harmless
the City, elected officials, employees, officers, representatives, and volunteers from any
and all claims, demands, actions, suits, causes of action, arbitrations, mediations,
proceedings, judgments, awards, injuries, damages, liabilities, taxes, losses, fines, fees,
penalties, expenses, attorney's or attorneys' fees, costs, and/or litigation expenses to or
by any and all persons or entities, arising from, resulting from,or related to the negligent
acts, errors or omissions of the Consultant in its performance of this Agreement or a
breach of this Agreement by Consultant, except for that portion of the claims caused by
the City's sole negligence.
Should a court of competent jurisdiction determine that this agreement is subject to RCW
4.24.115, (Validity of agreement to indemnify against liability for negligence relative to
construction,alteration, improvement,etc.,of structure or improvement attached to real
estate...) then, in the event of liability for damages arising out of bodily injury to persons
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or damages to property caused by or resulting from the concurrent negligence of the
Consultant and the City, its officers, officials, employees and volunteers, Consultant's
liability shall be only to the extent of Consultant's negligence.
It is further specifically and expressly understood that the indemnification provided in
this Agreement constitute Consultant's waiver of immunity under the Industrial
Insurance Act, RCW Title 51, solely for the purposes of this indemnification. The Parties
have mutually negotiated and agreed to this waiver. The provisions of this section shall
survive the expiration or termination of this Agreement.
11. Gifts and Conflicts: The City's Code of Ethics and Washington State law prohibit City
employees from soliciting, accepting, or receiving any gift, gratuity or favor from any
person, firm or corporation involved in a contract or transaction. To ensure compliance
with the City's Code of Ethics and state law,the Consultant shall not give a gift of any kind
to City employees or officials. Consultant also confirms that Consultant does not have a
business interest or a close family relationship with any City officer or employee who was,
is, or will be involved in selecting the Consultant, negotiating or administering this
Agreement, or evaluating the Consultant's performance of the Work.
12. City of Renton Business License: The Consultant shall obtain a City of Renton Business
License prior to performing any Work and maintain the business license in good standing
throughout the term of this agreement with the City.
Information regarding acquiring a city business license can be found at:
http://rentonwa.gov/business/default.aspx?id=548&mid=328.
Information regarding State business licensing requirements can be found at:
http://dor.wa.gov/content/doingbusiness/registermybusiness/
13. Insurance: Consultant shall secure and maintain:
A. Commercial general liability insurance in the minimum amounts of $1,000,000 for
each occurrence/$2,000,000 aggregate for the Term of this Agreement.
B. In the event that Work delivered pursuant to this Agreement either directly or
indirectly involve or require Professional Services, Professional Liability, Errors and
Omissions coverage shall be provided with minimum limits of $1,000,000 per
occurrence. "Professional Services", for the purpose of this section, shall mean any
Work provided by a licensed professional or Work that requires a professional
standard of care.
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C. Workers' compensation coverage, as required by the Industrial Insurance laws of the
State of Washington, shall also be secured.
D. Commercial Automobile Liability for owned,leased,hired or non-owned,leased,hired
or non-owned, with minimum limits of $1,000,000 per occurrence combined single
limit, if there will be any use of Consultant's vehicles on the City's Premises by or on
behalf of the City, beyond normal commutes.
E. Consultant shall name the City as an Additional Insured on its commercial general
liability policy on a non-contributory primary basis.The City's insurance policies shall
not be a source for payment of any Consultant liability, nor shall the maintenance of
any insurance required by this Agreement be construed to limit the liability of
Consultant to the coverage provided by such insurance or otherwise limit the City's
recourse to any remedy available at law or in equity.
F. Subject to the City's review and acceptance, a certificate of insurance showing the
proper endorsements, shall be delivered to the City before performing the Work.
G. Consultant shall provide the City with written notice of any policy cancellation,within
two (2) business days of their receipt of such notice.
14. Delays: Consultant is not responsible for delays caused by factors beyond the
Consultant's reasonable control. When such delays beyond the Consultant's reasonable
control occur,the City agrees the Consultant is not responsible for damages, nor shall the
Consultant be deemed to be in default of the Agreement.
15. Successors and Assigns: Neither the City nor the Consultant shall assign, transfer or
encumber any rights, duties or interests accruing from this Agreement without the
written consent of the other.
16. Notices: Any notice required under this Agreement will be in writing, addressed to the
appropriate party at the address which appears below (as modified in writing from time
to time by such party),and given personally, by registered or certified mail, return receipt
requested, by facsimile or by nationally recognized overnight courier service.Time period
for notices shall be deemed to have commenced upon the date of receipt, EXCEPT
facsimile delivery will be deemed to have commenced on the first business day following
transmission. Email and telephone may be used for purposes of administering the
Agreement, but should not be used to give any formal notice required by the Agreement.
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CITY OF RENTON CONSULTANT
Teresa Phelan Karyn Johnson
1055 South Grady Way 207 Y2 1st Avenue S, Suite 250
Renton, WA 98057 Seattle, WA 98104
Phone: (425) 430-7332 Phone: (406)-455-886-2-4V-5• 714 60 4
tphelan@rentonwa.gov karyn.johnson@WeAreHarris.com
Fax: (425) 430-7241
17. Discrimination Prohibited: Except to the extent permitted by a bona fide occupational
qualification, the Consultant agrees as follows:
A. Consultant, and Consultant's agents, employees, representatives, and volunteers
with regard to the Work performed or to be performed under this Agreement, shall
not discriminate on the basis of race, color, sex, religion, nationality, creed, marital
status, sexual orientation or preference, age (except minimum age and retirement
provisions), honorably discharged veteran or military status, or the presence of any
sensory, mental or physical handicap, unless based upon a bona fide occupational
qualification in relationship to hiring and employment, in employment or application
for employment, the administration of the delivery of Work or any other benefits
under this Agreement, or procurement of materials or supplies.
B. The Consultant will take affirmative action to insure that applicants are employed and
that employees are treated during employment without regard to their race, creed,
color, national origin, sex, age, sexual orientation, physical, sensory or mental
handicaps, or marital status. Such action shall include, but not be limited to the
following employment, upgrading, demotion or transfer, recruitment or recruitment
advertising, layoff or termination, rates of pay or other forms of compensation and
selection for training.
C. If the Consultant fails to comply with any of this Agreement's non-discrimination
provisions, the City shall have the right, at its option, to cancel the Agreement in
whole or in part.
D. The Consultant is responsible to be aware of and in compliance with all federal, state
and local laws and regulations that may affect the satisfactory completion of the
project, which includes but is not limited to fair labor laws, worker's compensation,
and Title VI of the Federal Civil Rights Act of 1964,and will comply with City of Renton
Council Resolution Number 4085.
18. Miscellaneous:The parties hereby acknowledge:
A. The City is not responsible to train or provide training for Consultant.
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B. Consultant will not be reimbursed for job related expenses except to the extent
specifically agreed within the attached exhibits.
C. Consultant shall furnish all tools and/or materials necessary to perform the Work
except to the extent specifically agreed within the attached exhibits.
D. In the event special training, licensing, or certification is required for Consultant to
provide Work he/she will acquire or maintain such at his/her own expense and, if
Consultant employs,sub-contracts,or otherwise assigns the responsibility to perform
the Work, said employee/sub-contractor/assignee will acquire and or maintain such
training, licensing, or certification.
E. This is a non-exclusive agreement and Consultant is free to provide his/her Work to
other entities,so long as there is no interruption or interference with the provision of
Work called for in this Agreement.
F. Consultant is responsible for his/her own insurance, including, but not limited to
health insurance.
G. Consultant is responsible for his/her own Worker's Compensation coverage as well as
that for any persons employed by the Consultant.
19. Other Provisions:
A. Approval Authority. Each individual executing this Agreement on behalf of the City
and Consultant represents and warrants that such individuals are duly authorized to
execute and deliver this Agreement on behalf of the City or Consultant.
B. General Administration and Management. The City's project manager is Teresa
Phelan. In providing Work, Consultant shall coordinate with the City's contract
manager or his/her designee.
C. Amendment and Modification. This Agreement may be amended only by an
instrument in writing, duly executed by both Parties.
D. Conflicts. In the event of any inconsistencies between Consultant proposals and this
Agreement, the terms of this Agreement shall prevail. Any exhibits/attachments to
this Agreement are incorporated by reference only to the extent of the purpose for
which they are referenced within this Agreement. To the extent a Consultant
prepared exhibit conflicts with the terms in the body of this Agreement or contains
terms that are extraneous to the purpose for which it is referenced,the terms in the
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body of this Agreement shall prevail and the extraneous terms shall not be
incorporated herein.
E. Governing Law. This Agreement shall be made in and shall be governed by and
interpreted in accordance with the laws of the State of Washington and the City of
Renton. Consultant and all of the Consultant's employees shall perform the Work in
accordance with all applicable federal, state, county and city laws, codes and
ordinances.
F. Joint Drafting Effort.This Agreement shall be considered for all purposes as prepared
by the joint efforts of the Parties and shall not be construed against one party or the
other as a result of the preparation, substitution, submission or other event of
negotiation, drafting or execution.
G. Jurisdiction and Venue.Any lawsuit or legal action brought by any party to enforce or
interpret this Agreement or any of its terms or covenants shall be brought in the King
County Superior Court for the State of Washington at the Maleng Regional Justice
Center in Kent, King County, Washington, or its replacement or successor.
H. Severability. A court of competent jurisdiction's determination that any provision or
part of this Agreement is illegal or unenforceable shall not cancel or invalidate the
remainder of this Agreement, which shall remain in full force and effect.
•I. Sole and Entire Agreement. This Agreement contains the entire agreement of the
Parties and any representations or understandings, whether oral or written, not
incorporated are excluded.
J. Time is of the Essence. Time is of the essence of this Agreement and each and all of
its provisions in which performance is a factor. Adherence to completion dates set
forth in the description of the Work is essential to the Consultant's performance of
this Agreement.
K. Third-Party Beneficiaries. Nothing in this Agreement is intended to, nor shall be
construed to give any rights or benefits in the Agreement to anyone other than the
Parties,and all duties and responsibilities undertaken pursuant to this Agreement will
be for the sole and exclusive benefit of the Parties and no one else.
L. Binding Effect. The Parties each bind themselves, their partners, successors, assigns,
and legal representatives to the other party to this Agreement, and to the partners,
successors, assigns, and legal representatives of such other party with respect to all
covenants of the Agreement.
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M. Waivers.All waivers shall be in writing and signed by the waiving party. Either party's
failure to enforce any provision of this Agreement shall not be a waiver and shall not
prevent either the City or Consultant from enforcing that provision or any other
provision of this Agreement in the future. Waiver of breach of any provision of this
Agreement shall not be deemed to be a waiver of any prior or subsequent breach
unless it is expressly waived in writing.
N. Counterparts. The Parties may execute this Agreement in any number of
counterparts, each of which shall constitute an original, and all of which will together
constitute this one Agreement.
IN WITNESS WHEREOF, the Parties have voluntarily entered into this Agreement as of the date
last signed by the Parties below.
CITY OF ' NTONII
CONSULTANT
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Denis Law . Ann Miyahira Hajn zz, P
Mayor Senior Director
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Contract Template Updated 12/29/2017
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EXHIBIT A - SCOPE OF WORK
The following Scope of Work identifies the tasks that Harris&Associates will perform for the City of Renton's
Water,Wastewater and Surface Water Rate and SDC Study.
Task 0001 Project Management
Perform administrative/management procedures for efficient study performance.The work plan and
schedule will be reviewed at the initial study meeting,with a final schedule of study milestones agreed upon.
Nth our monthly invoicing,our Project Manager will deliver written progress reports describing recent and
forthcoming efforts,potential challenges and/or needs from the aty,and a status of the study progress,
schedule and budget adherence.V1.ewill stay in regular contact with aty's project manager to address any
issues asthey arise.
Task 100 Initial Project Meeting
Participate in an initial project meeting with City staff to discuss study objectives,any issues and concerns of
the City or Consultant Team,and to clarify communication protocols. In particular,we will use this session to
review financial policies,discuss potential modifications to utility rate structures,and clarify the study
communication process. Prior to this meeting,we will submit a data request identifying the information
needed for the study.
Task 2001 Data Obllection and validation
Provide a data request list identifying financial and operational documents,and customer data pertinent to
the performance of the study. For optimal efficiency,we envision a single primary data collection effort
combining the data collection elementsfor all study tasks.However due to the aty's need for an early
preliminary rate run,therewill need to be an initial data collection effort with some of the data needing to be
replaced at a later date bythe final numbers. V1%will review,analyze,and validate such information as
necessary for use in formulating the technical analyses.M onsite data review meeting will be held if
necessary to ensure mutual understanding of data to be used in the analyses.
Task 300 - Prepare Rate Study
Task 3101 Determine Revenue Requirements
Develop a multi-year revenue requirement forecast for the water,wastewater,and surface water utilities to
determine annual rate revenue needs to fund capital programs,operating and maintenance costs,fiscal
policy achievement,and other financial obligations of each utility over the study period.The planning horizon
will span the 20-year period 2019-2039,with a focus on near-term rate adjustment strategies.
a I Financial Policies Review - Conduct a policy evaluation to determine existing practices which should be
maintained and explore alternative practices that might further City goals in funding utility obligations.This
task will begin with a high-level historical fiscal heath review to use as a baseline for policy development.A
comparison of these policies to industry standards can help provide context in determining whether there are
possible enhancements.Consistent with the City's current Policy Framework,we will address financial
performance,reserve policies, infrastructure replacement funding,and debt management.We will evaluate
the need for each reserve or policy,the basis for any minimum reserve targets,and the financial impacts for
establishing any new or revised policies. Sensitivity analyses will be performed to assess customer impacts
and revenue risk for all policy implications.
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b I Capital Funding Strategy - Review the current water,wastewater,and surface water capital plans,and
discuss with City staff needed additions or changes for this study.We will incorporate annual capital projects
and associated costs and escalate those costs to year of anticipated construction.We will then design capital
funding strategies intended to feasibly execute the capital programs with relatively level rate impacts.We will
evaluate an appropriate combination of resources from cash reserves,SDCs/SAD revenues,capital
contributions from rates,and debt to remain within industry standards and policy objectives for debt ratios
and coverage.
Unique funding strategies will be developed for each utility, likely resulting in a different mix of proposed
funding sources for each. Resulting debt service/coverage and other rate requirements for capital funding will
be identified for the planning period. Financial impacts of executing the capital programs are often a major
driver of utility rate increases.As such,we structure the capital funding analysis to allow for alternative
priority and scheduling of projects to evaluate rate changes under different project costs timing,and funding
options. In addition,we will continue the City's historical practice of incorporating a CIP realization factor,
based on a multi-year review of historical capital expenditures.This will allow the City to more closely align
each utility's actual execution of the planned capital program with the resources necessary to fund the
projects.
c I Operating Forecast - Forecast operating and maintenance costs of the water,wastewater,and surface
water systems over the study period. Prevailing operating budgets and line-item detail will form the baseline
for this forecast.We will then incorporate any additional O&M expenses for known or anticipated changes in
operational or administrative requirements such as regulatory impacts,additional staffing,deferred
maintenance and new or enhanced program initiatives. Economic factors will be applied for cost escalation
and the City's growth and demand assumptions.
d I1Niolesale %view - Review the Wholesale Water Rates analysis completed in 2015 and update the
wholesale water rates for 2019 and 2020.We will incorporate inflationary adjustments for future year cost
projection purposes.
eI I venueNeedsP sessment - Integrate selected financial policies,existing debt service,capital funding
impacts,and the operating forecast to develop an operating cash flow for the water,wastewater,and surface
water utilities over the study period.Compare projected requirements against projected revenue under
existing rates to determine annual adjustments needed to provide financial sustainability over time.Develop
a multi-year rate adjustment strategy for each utility that provides level rate impacts to the extent practical.
Sensitivity analyses will be performed to evaluate the impact of alternative capital funding strategies and
other input parameters as appropriate.Major cost drivers will be summarized for each utility.
Combined water,wastewater,and surface water rate impacts will affect individual customers differently.
Rate strategies will be developed considering staggered rate increases between water,wastewater,and
surface water and testing the individual and combined customer bill impacts.
Additionally,we will create a baseline scenario for each utility that applies the current level of SDCs to
estimated growth,which can then be compared against results using the updated calculation of charges.This
will inform decision makers of the impacts to existing customers if growth-related charges are not adjusted to
the maximum allowable level.
Task 320 I Oast of Service Analysis
Conduct the technical analyses necessary to provide a rational basis for allocating utility system costs,
assigning cost shares to customer classes,and recommending rate structures consistent with generally
accepted cost-of-service methods and City goals for pricing of utility services.The objective is to determine if
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current customer classes fairly apportion the expenses of the utilities and, if not,what changes are
recommended to enhance customer equity.
a I Customer Data Analysis and Profile - Develop a profile of the existing water,wastewater,and surface
water customer bases by reconciling historical customer billing system data with actual reported data for
each utility.The purpose of this exercise is to calibrate customer statistics so that they generate the correct
amount of revenue when the corresponding rate structure is applied.To address the variable nature of water
and sewer rates, it is important to evaluate a multi-year trend to mitigate revenue risks associated with
variances in usage patterns due to economic cycles,weather,and conservation initiatives.We will evaluate
three years of consumption data to determine a "normal year" usage profile for projecting future water
demands.The calibrated statistics will be adjusted for projected customer growth and demand normalization
to form the basis for allocating costs to customer classes and designing water and sewer rates. This task will
include a detailed analysis of residential winter period water usage for calculation of volume-based sewer
rates.
b I Functional Allocation - Determine appropriate cost allocation factors and assign system assets and
revenues requirements to functions of service as described below:
• Water functional components will include customer(accounts and meter size),base demand(average
use), peak demand,and fire protection.
• Wastewater functional components will include customer and flow components.Treatment is
provided by King County Metro.
• Surface water cost allocations are typically less complicated than for water and wastewater.A
simplified allocation of costs between"base"and"use"components is generally adequate for
purposes of establishing credit policies for onsite mitigation. Further parameters may be warranted
to address the City's interest in evaluating additional tiers to the existing graduated/multi-tiered rate
structure.
c Customer Class Distribution - Allocate the costs assigned to each function of service to customer classes
using the customer base profile developed in Task 320(a)and allocation parameters from Task 320(b).Water
classes include:single family and multi-family residential,commercial and industrial,private landscape
irrigation,City landscape irrigation, low income and disabled person,and fire protection meters.Wastewater
classes include:single family and multi-family residential and commercial/industry.Surface water classes
include single family and non-single family(comprised of commercial properties,gravel pits and City streets).
We do not anticipate the need to revise water and wastewater utility customer classes in order to achieve the
City's equity and pricing goals. Modifications to the surface water level of intensity categories will be
considered.
We will summarize the resulting cost of service by customer class and compare to existing revenue recovery
to determine potential shifts between customer classes. In addition,we will summarize average unit costs by
customer class both for existing distribution and cost of service distribution.Average unit costs are derived by
dividing the revenues by the usage for each class,and are helpful in communicating potential shifts in
customer class cost recovery, prior to establishing the actual fixed and variable rate components.
d I Unit Gbstsof Service Development - Derive unit cost of service by functional component to serve as the
building blocks for alternative rate structure designs.This exercise will include identification of the costs for
appropriate recovery between the fixed and variable rate components to balance revenue stability,efficiency
of use,and affordability.
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Task 330 I Bate Structure Design
Evaluate the performance of existing water,wastewater,and surface water rate structures and develop
alternative structures t hat might better address long-term utility needs and customer concerns. Preliminary
rate structure optionswill be identified during the initial project meeting and further vetted following the cost
of service analysis.
a I Plternative Rate Structure Evaluation - Review and evaluate the existing utility rate structures as a
baseline for comparing recommended alternatives. Design up to three(3)alternative rate schedules by
customer class for each utility that incorporate proposed rate revenue increases,cost of service findings,and
desired changes to pricing strategies for each system.At a minimum,we will evaluate:
• An appropriate reduction in the water base charge between the 3/4-inch meter and 1-inch meter
• Potential modifications/additions to residential water usage tiers to address affordability issues,such
as developing a lifeline block,and to incentivize conservation,such as enhancing top tier and
irrigation pricing signals
• Evaluate sewer non-single family rate breakdown of base charge versus usage charge
• Adding additional graduated/multi-tier categories for non-single family surface water customers
• Options for calculating surface water total area and total impervious area,and effect on customer
accounts and the net change to rate revenue
• Outside City rates will be calculated applying the City existing rate multiplier
We will evaluate and demonstrate the ability of the proposed rates to generate the projected and required
revenues by testing rates against composite system customer demand. Further,we will identify the portion of
revenues that are anticipated to be collected from the fixed and variable rate components. Prepare
implementation and rate management policies and procedures as needed.
b I Sample Customer Bill Impacts - For each rate structure alternative,we will analyze the potential rate
impacts for each customer, and in summary by customer class,based on historical usage patterns and service
attributes. Resulting sample bills will be compared against existing customer bills and a selection of up to six
(6)comparable jurisdictions.
Task 400 - Update System Development Charges
Review methodologies and calculate updated water,wastewater,and surface water SDCS based on existing
capacity and eligible capital projects for the two-year period 2019-2020,consistent with the City's biennial
SDC update cycle.
a I Review Bdsting Methodologies - Evaluate the nexus and effectiveness of the City's existing SDC
methodologies and charge structures with current and projected demands.The City's current SDC
methodology incorporates existing system facilities costs and associated capacity and eligible capital
projects/capacity scheduled for execution within the upcoming two-year planning cycle. In addition to the 2-
year calculation,we will prepare scenarios that incorporate capital projects/capacity for 4 years,6 years,and
10-years.
b I Determine Bdsting and Future(bst Basis of Systems - Determine the cost of each system's existing
infrastructure and corresponding capacity.For each scenario,we will evaluate the capital improvements
within the planning periods for upgrade/expansion of the existing system capacities to be added to the cost of
the existing system along with any change in capacity resulting from those improvements.
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c I Determine Equivalent Units of Slervioe - Determine equivalent units of demand for each system both in
terms of the existing customer base and growth expected to benefit from the capital improvement projects
included for the 2-year,4-year,6-year,and 10-year scenarios.
d I CalculateSDO3 - Calculate cost-based SDCs for each systems for each scenario,taking into consideration
any necessary adjustments for outstanding debt,contributed facilities,or contractual obligations. Prepare
implementation and fee management policies and procedures as needed.
Task 500 - Attend and Facilitate Meetings
Prepare for and facilitate the following meetings:
a i Interim Review Meetings - Anticipate up to four(4)events,onsite and virtual as agenda warrants,to
review interim study progress with varying groups of utility staff and management. It is possible that these
meetings will be a combination of findings reviews and working sessions with City staff where our Project
Manager will run hands-on modeling of"what if" revenue requirement scenarios to assist the City in
evaluating a multitude of varying cost impacts and multi-year rate adjustment strategies.Summarize action
and direction and submit to the City's project manager after each event.
b I Committee/Council Meetings - At the City's discretion,we will attend one(1) meeting with City Council
and/or committee members to review study outcomes and recommendations.
C.I Model Training - Conduct a half-day onsite training session with City staff to review model inputs and
functionality for updating the revenue requirement portion of the rate model. Provide individualized hands-
on training and phone consultations as requested.
d.I Presentation Materials - Prepare and submit summary materials, presentations,and agendas to the
City's project manager in advance of each meeting to enable efficient and effective communication. Materials
will be tailored to the specific audience of each meeting.
Task 600 - Prepare%ports/ Documentation and Study Deliverables
Provide the City with thorough documentation of study results,including written reports/documentation,
and electronic rate and SDC models.
a I Draft Report - Author a draft report summarizing data sources, assumptions, methodologies,findings,
recommendations and supporting data. Reports will include a combination of narrative,tabular,and
graphical representation of results.
b i Anal Report - Revise the draft report based on City comments and submit a final report.
o I User Glide - Prepare an easy to follow user guide for in-house updates of the revenue requirement
portion of the rate model.
d I Study Deliverables - Provide the following deliverables to the City:
• Electronic and/or five(5) bound copies of draft and final reports
• Electronic copy of updated rate and SDC models(Excel)
• Electronic copy of revenue requirement portion of model for future City updates(Excel)
• Electronic and five(5) hardcopy of revenue requirement user guide(Word)
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EXHIBIT B - COMPENSATION
The exhibit below presents estimated hours by task by professional, hourly billing rates,and fees for the
Scope of Work described in Exhibit A.
Harris&Associates Carollo Total
Karyn Ann Diana Lara
Johnson Hajnosz She ng Admin Kammereck
Hourly Billing Rate $220 $250 $125 $50 $244
Task 000 Project Management
Mananagment and Administration 18.00 3.00 - 1.50 1.50 $5,150
Subtotal Hours= 18.00 3.00 - 1.50 1.50 24.00
Subtotal Labor($)= $3,960 $750 $0 $75 $365 $5,150
Task 100 Initial Project Meeting
Initial Project Meeting 3.00 3.00 - - 3.00 $2,141
Subtotal Hours= 3.00 3.00 - - 3.00 9.00
Subtotal Labor($)_ $660 $750 $0 $0 $731 $2,141
Task 200 Data Collection and Validation
Data Collection and Validation 6.00 - 20.00 - 2.00 $4,307
Subtotal Hours= 6.00 - 20.00 - 2.00 28.00
Subtotal Labor($)= $1,320 $0 $2,500 $0 $487 $4,307
Task 300 Prepare Rate Study
310 Revenue Requirements 48.00 6.00 120.00 - 8.00 $29,009
320 Cost of Service Analysis 32.00 6.00 90.00 - 4.00 $20,764
330 Rate Desisgn 32.00 6.00 72.00 - - $17,540
Subtotal Hours= 112.00 18.00 282.00 - 12.00 424.00
Subtotal Labor($)= $24,640 $4,500 $35,250 $0 $2,923 $67,313
Task 400 Update SDCs
Update SDCs 26.00 3.00 64.00 - 6.00 $15,932
Subtotal Hours= 26.00 3.00 64.00 - 6.00 99.00
Subtotal Labor($)= $5,720 $750 $8,000 $0 $1,462 $15,932
Task 500 Attend and Faciliate Meeting
Attend and Faciliate Meeting 19.00 2.00 8.00 - 2.00 $6,167
Subtotal Hours= 19.00 2.00 8.00 - 2.00 31.00
Subtotal Labor($)_ $4,180 $500 $1,000 $0 $487 $6,167
Task 600 Prepare Reports and Study Deliverables
Prepare Reports and Study Deliverables 32.00 6.00 40.00 - - $13,540
Subtotal Labor($)= 32.00 6.00 40.00 - - 78
Subtotal Labor($)_ $7,040 $1,500 $5,000 $0 $0 $13,540
Total Hours by Classification= 216.00 35.00 414.00 1.50 26.50 693.00
Mileage Expense($.545/mile) $169
$114,719
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EXHIBIT C - SCHEDULE
The exhibit below presents the schedule for completion of major task milestones.
A ril May June July August Se tember
Week Ending: 2 1 9176123130 6 1 1320127 4 1111 18.25 1 1 8 1 15122129 6 113120127 31101 17124131 7 14121128
Task 000:Project Management
Task 100 Initial Project Meeting
Task 200 Data Collection and Validation
Task 300 Prepare Rate Study
Task 3101 Deterrrine Revenue Requirements s
Task 3201 Cost of Service Analysis
Task 3301 Rate Structure Design
Task 400 Update System Development Charges
Task 500 Attend and Facilitate Meetings
Task a�Interim Review s
Task bi Committee/Council Meeting(TBD)
Task ci Model Training
Task 600 Prepare Reports/Study Deliverables
Task al Draft Report
Task bl Final Report
Task cl User Guide
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