HomeMy WebLinkAboutRAFTELIS FINANCIAL CONSULTANTS INC; 2013-01-11; UTIL964UTIL964
AGREEMENT FOR WATER COST OF SERVICE (COS) RATE STUDY SERVICES
(RAFTELIS FINANCIAL CONSULTANTS, INC.)
THIS AGREEMENT is made and entered into as of the //""^ day of
^ 20^, by and between the CARLSBAD MUNICIPAL WATER
DISTRICT, a PuBtIt Agency organized under the Municipal Water Act of 1911, and a Subsidiary
Distnct of the City of Carlsbad. ("CMWD"), and RAFTELIS FINANCIAL CONSULTANTS INC
a North Carolina corporation, ("Contractor").
RECITALS
A. CMWD requires the professional services of a consultant that Is experienced in
financial water rate analysis.
B. Contractor has the necessary experience in providing professional services and
advice related to water rate analysis.
C. Contractor has submitted a proposal to CMWD and has affirmed its willingness
and ability to perform such work.
NOW, THEREFORE, in consideration of these recitals and the mutual covenants
contained herein, CMWD and Contractor agree as follows:
1. SCOPE OF WORK
CMWD retains Contractor to perform, and Contractor agrees to render, those services (the
"Services") that are defined in attached Exhibit "A", which is incorporated by this reference in
accordance with this Agreement's terms and conditions.
2. STANDARD OF PERFORMANCE
While performing the Services, Contractor will exercise the reasonable professional care and
skill customarily exercised by reputable members of Contractor's profession practicing in the
Metropolitan Southern California Area, and will use reasonable diligence and best judgment
while exercising its professional skill and expertise.
3. TERM
The term of this Agreement will be effective for a period of one (1) year from the date first above
written. The Executive Manager may amend the Agreement to extend it for one (1) additional
one (1) year period or part thereof in an amount not to exceed one hundred thousand dollars
($100,000) per Agreement year. Extensions will be based upon a satisfactory review of
Contractor's perfomnance, CMWD needs, and appropriation of funds by the CMWD Board of
Directors. The parties will prepare a written amendment indicating the effective date and length
of the extended Agreement.
4. TIME IS OF THE ESSENCE
Time is of the essence for each and every provision of this Agreement.
5. COMPENSATION
The total fee payable for the Services to be perfonned during the initial Agreement terni will be
ninety nine thousand six hundred thirty dollars ($99,630). No other compensation for the
Services will be allowed except for items covered by subsequent amendments to this
Agreement. CMWD reserves the right to withhold a ten percent (10%) retention until CMWD
has accepted the wori< and/or Services specified in Exhibit "A".
Incremental payments, if applicable, should be made as outlined in attached Exhibit "A".
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6. STATUS OF CONTRACTOR
Contractor will perform the Services In Contractor's own way as an Independent contractor and
in pursuit of Contractor's Independent calling, and not as an employee of CMWD. Contractor will
be under control of CMWD only as to the result to be accomplished, but will consult with CMWD
as necessary. The persons used by Contractor to provide services under this Agreement will not
be considered employees of CMWD for any purposes.
The payment made to Contractor pursuant to the Agreement will be the full and complete
compensation to which Contractor is entitled. CMWD will not make any federal or state tax
withholdings on behalf of Contractor or its agents, employees or subcontractors. CMWD will not
be required to pay any workers' compensation Insurance or unemployment contributions on
behalf of Contractor or its employees or subcontractors. Contractor agrees to indemnify CMWD
and the City of Carlsbad within thirty (30) days for any tax, retirement contribution, social
security, overtime payment, unemployment payment or wori^ers' compensation payment which
CMWD may be required to make on behalf of Contractor or any agent, employee, or
subcontractor of Contractor for work done under this Agreement. At CMWD's election, CMWD
may deduct the indemnification amount from any balance owing to Contractor.
7. SUBCONTRACTING
Contractor will not subcontract any portion of the Services without prior written approval of
CMWD. If Contractor subcontracts any of the Services, Contractor will be fully responsible to
CMWD for the acts and omissions of Contractor's subcontractor and of the persons either
directly or Indirectly employed by the subcontractor, as Contractor is for the acts and omissions
of persons directly employed by Contractor. Nothing contained In this Agreement will create any
contractual relationship between any subcontractor of Contractor and CMWD. Contractor will be
responsible for payment of subcontractors. Contractor will bind every subcontractor and every
subcontractor of a subcontractor by the terms of this Agreement applicable to Contractor's work
unless specifically noted to the contrary In the subcontract and approved In writing by CMWD.
8. OTHER CONTRACTORS
CMWD reserves the right to employ other Contractors in connection with the Services.
9. INDEMNIFICATION
Contractor agrees to indemnify and hold hamiless the City and Its officers, officials, employee^
and volunteers from and against all claims, damages, losses and expenses including attorneys
fees arising out of the performance of the work described herein caused by any negligence,
recklessness, or willful misconduct of the Contractor, any subcontractor, anyone directly or
Indirectly employed by any of them or anyone for whose acts any of them may be liable.
The parties expressly agree that any payment, attorney's fee, costs or expense City Incurs or
makes to or on behalf of an injured employee under the City's self-administered workers'
compensation Is included as a loss, expense or cost for the purposes of this section, and that
this section will survive the expiration or eariy temnlnation of this Agreement.
10. INSURANCE
Contractor will obtain and maintain for the duration of the Agreement and any and all
amendments, insurance against claims for injuries to persons or damage to property which may
arise out of or in connection with perfonnance of the services by Contractor or Contractor's
agents, representatives, employees or subcontractors. The Insurance will be obtained from an
insurance earner admitted and authorized to do business In the State of California. The
insurance earner is required to have a cun^ent Best's Key Rating of not less than "A-:VII", OR
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with a surplus line insurer on the State of California's List of Eligible Surplus Line insurers
(LESLI) with a rating in the latest Best's Key Rating Guide of at least "AX".
10.1 Coverages and Limits.
Contractor will maintain the types of coverages and minimum limits indicated below, unless the
Risk Manager or Executive Manager approves a lower amount. These minimum amounts of
coverage will not constitute any limitations or cap on Contractor's indemnification obligations
under this Agreement. CMWD, its officers, agents and employees make no representation that
the limits of the insurance specified to be canried by Contractor pursuant to this Agreement are
adequate to protect Contractor. If Contractor believes that any required insurance coverage is
inadequate, Contractor will obtain such additional insurance coverage, as Contractor deems
adequate, at Contractor's sole expense.
10.1.1 Commercial General Liability Insurance. $1,000,000 combined single-limit
per occurrence for bodily Injury, personal injury and property damage. If the submitted policies
contain aggregate limits, general aggregate limits will apply separately to the work under this
Agreement or the general aggregate will be twice the required per occun-ence limit.
10.1.2 Automobile Liability (If the use of an automobile is Involved for Contractor's
work for CMWD). $1,000,000 combined single-limit per accident for bodily injury and property
damage.
10.1.3 Wori<ers' Compensation and Employer's Liability. Workers' Compensation
limits as required by the California Labor Code. Wori<ers' Compensation will not be required if
Contractor has no employees and provides, to CMWD's satisfaction, a declaration stating this.
10.14 Professional Liability. Errors and omissions liability appropriate to
Contractor's profession with limits of not less than $1,000,000 per claim. Coverage must be
maintained for a period of five years following the date of completion of the work.
Q If box is checked. Professional Liability
CMWD's Initials Contractor's Initials Insurance requirement is waived.
10.2. Additional Provisions. Contractor will ensure that the policies of insurance required under
this Agreement contain, or are endorsed to contain, the following provisions: <
10.2.1 CMWD will be named as an additional insured on Commercial General
Liability which shall provide primary coverage to CMWD.
10.2.2 Contractor will obtain occurrence coverage, excluding Professional Liability,
which will be written as claims-made coverage.
10.2.3 This insurance will be in force during the life of the Agreement and any
extensions of it and will not be canceled without thirty (30) days prior written notice to CMWD
sent by certified mail pursuant to the Notice provisions of this Agreement.
10.3 Providing Certificates of Insurance and Endorsements. Prior to CMWD's execution of
this Agreement, Contractor will furnish certificates of insurance and endorsements to CMWD.
10.4 Failure to Maintain Coverage. If Contractor fails to maintain any of these Insurance
coverages, then CMWD will have the option to declare Contractor in breach, or may purchase
replacement insurance or pay the premiums that are due on existing policies in order to ,
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maintain the required coverages. Contractor is responsible for any payments made by CMWD
to obtain or maintain insurance and CMWD may collect these payments from Contractor or
deduct the amount paid from any sums due Contractor under this Agreement.
10.5 Submission of Insurance Policies. CMWD resen/es the right to require, at anytime,
complete and certified copies of any or all required Insurance policies and endorsements.
11. BUSINESS LICENSE
Contractor will obtain and maintain a City of Carisbad Business License for the term of the
Agreement, as may be amended from time-to-tlme.
12. ACCOUNTING RECORDS
Contractor will maintain complete and accurate records with respect to costs incurred under this
Agreement. All records will be clearly identifiable. Contractor will allow a representative of
CMWD during normal business hours to examine, audit, and make transcripts or copies of
records and any other documents created pursuant to this Agreement. Contractor will allow
Inspection of all work, data, documents, proceedings, and activities related to the Agreement for
a period of three (3) years from the date of final payment under this Agreement.
13. OWNERSHIP OF DOCUMENTS
All work product produced by Contractor or its agents, employees, and subcontractors pursuant
to this Agreement is the property of CMWD. In the event this Agreement is terminated, all work
product produced by Contractor or Its agents, employees and subcontractors pursuant to this
Agreement will be delivered at once to CMWD. Contractor will have the right to make one (1)
copy of the work product for Contractor's records.
14. COPYRIGHTS
Contractor agrees that all copyrights that arise from the services will be vested in CMWD and
Contractor relinquishes all claims to the copyrights In favor of CMWD.
15. NOTICES
The name of the persons who are authorized to give written notices or to receive written notice
on behalf of CMWD and on behalf of Contractor under this Agreement.
For CMWD
Name
Title
Christine Ruess
Sr. Management Analyst
Carisbad Municipal Water
District
Address 5650 El Camino Real
Carlsbad CA 92008
Phone 760 438 2722. ext. 7110
For Contractor
Name Sudhir Pardiwala
Title
Address
Phone
E-mail
Vice President
201 S. Lake Avenue. Suite 301
Pasadena CA91101
626 583 1894
spardlwala@raftelis. com
Each party will notify the other immediately of any changes of address that would require any
notice or delivery to be directed to another address.
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16. CONFLICT OF INTEREST
Contractor shall file a Conflict of Interest Statement with the City Clerk in accordance with the
requirements of the City of Carlsbad Conflict of Interest Code. The Contractor shall report
Investments or Interests In all four categories.
17. GENERAL COMPLIANCE WITH LAWS
Contractor will keep fully informed of federal, state and local laws and ordinances and
regulations which in any manner affect those employed by Contractor, or in any way affect thd
performance of the Services by Contractor. Contractor will at all times observe and comply with
these laws, ordinances, and regulations and will be responsible for the compliance of
Contractor's services with all applicable laws, ordinances and regulations.
Contractor will be aware of the requirements of the Immigration Reform and Control Act of 1986
and will comply with those requirements, including, but not limited to, verifying the eligibility for
employment of all agents, employees, subcontractors and consultants that the services required
by this Agreement. ,
18. DISCRIMINATION AND HARASSMENT PROHIBITED
Contractor will comply with all applicable local, state and federal laws and regulations prohibiting
discrimination and harassment
19. DISPUTE RESOLUTION
If a dispute should arise regarding the perfonnance of the Services the following procedure will
be used to resolve any questions of fact or Interpretation not othenA/ise settled by agreement
between the parties. Representatives of Contractor or CMWD will reduce such questions, and
their respective views, to writing. A copy of such documented dispute will be fonfl/arded to both
parties Involved along with recommended methods of resolution, which would be of benefit to
both parties. The representative receiving the letter will reply to the letter along with a
recommended method of resolution within ten (10) business days. If the resolution thus
obtained Is unsatisfactory to the aggrieved party, a letter outlining the disputes will be fonw^arded
to the Executive Manager. The Executive Manager will consider the facts and solutions
recommended by each party and may then opt to direct a solution to the problem. In such
cases, the action of the Executive Manager will be binding upon the parties Involved, although
nothing in this procedure will prohibit the parties from seeking remedies available to them at taw.'
20. TERMINATION
In the event of the Contractor's failure to prosecute, deliver, or perform the Services, CMWD
may tenninate this Agreement for nonperfomriance by notifying Contractor by certified mail of
the termination. If CMWD decides to abandon or indefinitely postpone the work or services
contemplated by this Agreement, CMWD may terminate this Agreement upon written notice to
Contractor. Upon notification of tennination. Contractor has five (5) business days to deliver any
documents owned by CMWD and all wori^ in progress to CMWD address contained in this
Agreement. CMWD will make a detemiination of fact based upon the wori^ product delivered to
CMWD and of the percentage of work that Contractor has perfonned which is usable and of
worth to CMWD in having the Agreement completed. Based upon that finding CMWD will
detennine the final payment of the Agreement.
Either party upon tendering thirty (30) days written notice to the other party may terminate this
Agreement. In this event and upon request of CMWD, Contractor will assemble the work
product and put it in order for proper filing and closing and deliver It to CMWD. Contractor wilt be
paid for work performed to the tennination date; however, the total will not exceed the lump sum
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fee payable under this Agreement. CMWD will make the final determination as to the portions of
tasks completed and the compensation to be made.
21. COVENANTS AGAINST CONTINGENT FEES
Contractor warrants that Contractor has not employed or retained any company or person, other
than a bona fide employee working for Contractor, to solicit or secure this Agreement, and that
Contractor has not paid or agreed to pay any company or person, other than a bona fide
employee, any fee, commission, percentage, brokerage fee, gift, or any other consideration
contingent upon, or resulting from, the award or making of this Agreement. For breach or
violation of this warranty, CMWD will have the right to annul this Agreement without liability, or,
in its discretion, to deduct from the Agreement price or consideration, or othenwise recover, the
full amount of the fee, commission, percentage, brokerage fees, gift, or contingent fee.
22. CLAIMS AND LAWSUITS
By signing this Agreement, Contractor agrees that any agreement claim submitted to CMWD
must be asserted as part of the agreement process as set forth in this Agreement and not \r\
anticipation of litigation or in conjunction with litigation. Contractor acknowledges that if a false
claim is submitted to CMWD, It may be considered fraud and Contractor may be subject to
criminal prosecution. Contractor acknowledges that California Government Code sections
12650 et seg.. the False Claims Act applies to this Agreement and, provides for civil penalties
where a person knowingly submits a false claim to a public entity. These provisions include
false claims made with deliberate ignorance of the false information or in reckless disregard of
the truth or falsity of information. If CMWD seeks to recover penalties pursuant to the False
Claims Act, it is entitled to recover its litigation costs, including attorney's fees. Contractor
acknowledges that the filing of a false claim may subject Contractor to an administrative
debannent proceeding as the result of which Contractor may be prevented to act as a
Contractor on any public work or improvement for a period of up to five (5) years. Contractor
acknowledges debarment by another jurisdiction is grounds for CMWD to tenninate this
Agreement.
23. JURISDICTIONS AND VENUE
Any action at law or in equity brought by either of the parties for the purpose of enforcing a right
or rights provided for by this Agreement will be tried In a court of competent jurisdiction In the
County of San Diego, State of California, and the parties waive all provisions of law providing foi^
a change of venue in these proceedings to any other county.
24. SUCCESSORS AND ASSIGNS
It Is mutually understood and agreed that this Agreement will be binding upon CMWD and
Contractor and their respective successors. Neither this Agreement or any part of it nor any
monies due or to become due under it may be assigned by Contractor without the prior consent
of CMWD, which shall not be unreasonably withheld.
25. ENTIRE AGREEMENT
This Agreement, together with any other written document refen-ed to or contemplated by It,
along with the purchase order for this Agreement and its provisions, embody the entire
Agreement and understanding between the parties relating to the subject matter of It. In case of
conflict, the tenns of the Agreement supersede the purchase order. Neither this Agreement nor
any of its provisions may be amended, modified, waived or discharged except in a writing
signed by both parties.
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26. AUTHORITY
The individuals executing this Agreement and
Contractor each represent and wan^ant that they
to bind Contractor to the tenns and conditions of
CONTRACTOR
RAFTELIS FINANCIAL CONSULTANTS,
INC., a North Carolina corporation
the instruments referenced in It on behalf of
have the legal power, right and actual authority
this Agreement.
CARLSBAD MUNICIPAL WATER DISTRICT, ij^
a Public Agency organized under the \
Municipal Water Act of 1911, and a u
Subsidiary District of the City .of Carisbad
(print nafhe/title)
By:
2>^. «Hi^o'oident er Executive
or Divioien Dirootor oo
Executive Monogor-
rtlve Manager .<>%^s^'i^'ii'\
euthoriaod by ^^••:S^UA^'^.^\
r DB:9=
ATTEST:
^(sign here)
(print name/title)
Secretary
If required by CMWD, proper notarial acknowledgment of execution by contractor must be
attached. If a corporation. Agreement must be signed by one corporate officer from each of the
following two groups.
Group A
Chairman,
President, or
Vice-President
Group B
Secretary,
Assistant Secretary,
CFO or Assistant Treasurer
Otherwise, the corporation must attach a resolution certified by the secretary or assistant
secretary under corporate seal empowering the officer(s) signing to bind the corporation.
APPROVED AS TO FORM:
RONALD R. BALL, General Counsel
Bv: )(\9.K CU^
Assistant GeneralCoupsel
,^SV\\»»"l"<////.,
Notary Public
Mecklenburg County
Mecklenburg County, North Carolina ^
I certify that the following persons personally appeared before me this day, each acknowledging to me that he or she signed the
foregoing document: Harold Smith as Vice President, and Diane Adams as Chief Financial Officer of Raftelis Financial Consultants, Inc.
Date: December 5, 2012 Carrie B. Warren, Notary Public
My commission expires: December 18, 2016
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Exhibit "A"
SCOPE
The following sections outline the tasks we believe will be involved to complete a COSS that
accomplishes all of the District's goals. While tasks are listed consecutively, elements of tasks may be
done concurrently with other tasks.
TASK 1: PROJECT INITIATION, MANAGEMENT & DATA COLLECTION
The purpose of this task is to gather and review relevant information, documents, and analyses that will be
required to conduct the study. The kick-off meeting provides a solid foundation for the project and ensures
that project participants are in mutual agreement as to the project goals and expectations. RFC will
develop a kick-off meeting package that will provide a forum for RPC to develop an understanding of the
District's pricing objectives, fmancial goals, and other important utility issues. As part of this task, RFC
will review pricing objectives and assist the District stakeholders to prioritize pricing objectives so that
RFC can efficiently evaluate and recommend rate structure altematives.
TASK 2: DEVELOP FINANCIAL OBJECTIVES AND RECOMMEND POLICIES
Task 2.1: Develop Financial Objectives
RFC will work with District staff to develop objectives for the rate structure. As part of this task, traits
such as revenue stability, ease of administration, conservation, customer understanding, ease of
implementation, etc. will all be considered in determining the rate structure. Alternative rate structures
will be evaluated based on the most important pricing objectives to identify the structure that best meets
the needs of the District.
Task 2.2: Develop Financial/Rate Policies
While developing a focused objective for the rate structure, RFC will work with management to identif>;
financial and rate policies that will add value to the District. These Financial/Rate Policies will work to
further promote the financial objectives developed with District input. The depth of our resources and
experience has allowed us to develop some of the most sophisticated and user-friendly financial/rate
models. These models are tools that allow us to examine different policy options and their
financial/customer impacts in real time. In a workshop environment, this allows us to determine which
policy option is feasible and reach consensus quickly.
TASK 3: FINANCIAL PLAN DEVELOPMENT
Task 3.1: Water Financial Plan
This task will include the projections of budget items, such as annual costs related to: sources of water
supply, labor, power, materials, capital expenditures, plant investment, operating and maintenance
(O&M) expenses, reserve contributions, depreciation and debt service using assumptions based on
different economic factors and growth trends.
RFC will develop a forecast of water revenue requirements over the planning horizon. This will include
an estimate of revenues based on current rates, usage characteristics, and other non-operating revenues.
Revenue requirements will be projected based on historical results, the current budget, capital
improvement plans (CIP), existing debt service, other obligations and current economic trends. Rates,
debt, grants, government subsidies, or infrastructure bank loans will be provided as options for capital
cost financing. Projecting revenue adjustments over a longer planning horizon can illustrate f\iture rate
impacts and potential challenges to the District's financial situation and allow the District to make
1
adjustments to expenses, reserve balances or capital projects scheduling to smooth rate impacts and to
maintain fmancial stability.
RFC will develop a multi-year cash flow analysis to determine revenue adjustments needed to meet
projected revenue requirements for the planning period, while minimizing sharp rate fluctuations and debt
coverage requirements. Revenue requirements will be calculated for each year in the forecast period and
adjusted to provide for a smooth forecast of revenue adjustments. For example, changes in the timing of
capital expenditures and the use of reserve funds to mitigate short-term rate impacts are two ways that
revenue smoothing could be addressed. The objective is to minimize the magnitude of customer impacts
while still achieving long-term revenue objectives. RFC will also review reserves policies to recommend
appropriate reserves balances (operating, capital, rate stabilization, etc.) consistent with industry standards
and the District's risk management practice.
The financial plans will be presented in an easy to understand fonnat on a dashboard which shows the
impacts of various assumptions so that decisions regarding revenue adjustments, capital financing through
pay-go or debt and reserve balances can all be made quickly and efficiently. A snapshot of the dashboard
is shown below.
Task 3.2: Recycled Water Financial Plan
Similarly, RFC will develop a multi-year Recycled Water Financial Plan to ensure financial sufficiency
for recycled water operations and capital costs, while minimizing rate impacts as much as possible. RFC
will consider potential sales to other wholesalers in the financial plan.
TASK 4: COST OF SERVICE
Task 4.1: Cost of Service Analysis
RFC will develop cost-based rates based on varying water sources, water consumption, peaking and usage
characteristics and power purchase tariff rates. Throughout the cost allocation process, RFC will comply
with District policy considerations, procedures, and guidelines applicable to charges for water service and
ensure that proposed rates are in compliance with Proposition 218.
The first step is to allocate the cost of service to the various functional cost components including
capacity-related costs, commodity costs, private fire protection costs, customer and other indirect costs.
Next, the costs associated with the functional components will be allocated to the various customer
classifications on the basis of the relative responsibility of each classification for service provided. Costs
will be allocated based on the determination of units of service for each customer classification and the
application of unit costs of service to the respective units. Marginal unit costs will also be determined
based on peak demand for various customer classes.
Task 4.2 Determine the Cost of Providing Recycled Water
RFC will determine the total cost of providing recycled water to customers. Special consideration will be
made as to the source of the recycled water, wastewater permit requirements and any existing recycled
water purchase agreements. Rates to wholesale customers can be determined separately based on the
costs of providing service to them. Such rates can be differentiated fi-om the rates to the District's
customers based on facilities required to serve these customers and their usage characteristics including
peaking requirements.
TASK 5: CALCULATE RATES AND ASSOCIATED IMPACTS
Task 5.1: Develop Water Rates
The rate calculation Model will be developed to incorporate and evaluate alternative rate structures that
best meet the District's objectives. The potential financial impacts on customers that may result from the
alternative rate structures will be evaluated so that an informed decision can be made regarding the rate
structure that should be recommended for implementation. The Models will include a series of tables and
figures that show projected rate impacts on different types of customers at different levels of usage or
generation. These figures provide an invaluable tool for evaluating whether the rate recommendations are
impacting targeted customer groups and/or levels of usage to ensure that conservation and other pricing
objectives are being addressed effectively. RFC will present the preliminary rate calculations at ^
workshop.
The calculated drought rates will be derived from the underiying existing rate structure. In order to
simulate drought conditions, the rate Model will have the ability to reduce revenue and water purchase
costs associated with a drop in consumption. Based on the usage analysis, RFC will calculate multi-year
drought rates to ensure all revenue requirements are met during a period of reduced consumption. Drought
rates will be ready to implement as soon as conditions warrant, so that valuable time is not lost. RFC has
successfully developed drought rates under varying drought conditions in the neighboring San Dieguito
Water District.
Based on our analysis of the District's master plans and the assets, RFC can evaluate the District's potable
water connection fees based on the buy-in and incremental methodologies and recommend the one that is
most applicable to the District. The calculation of the fees will depend on fixed assets, planned capital
improvements, capital financing assumptions, system capacities, and the level of service or demand
required to serve new customers. Proposed connection fees will meet applicable regulatory requirements
in developing rates and connections fees.
Task 5.2: Develop Recycled Water Rates
Similariy, RFC will develop recycled water rates on a cost of service basis and market basis as
appropriate. Currently, there are three types of customers that purchase recycled water: customers located
inside the service area, customers located outside of the service area and large volume customers inside
the service area. Keeping this in mind, RFC will recommend the recycled water rate that best suits the
objectives of the District. Rates for potential wholesale customers will also be calculated based on the
costs required to serve those customers. Optimal use of recycled water will increase the revenue stream
available to the District and benefit the District's customers.
Task 5.3: Survey Water and Recycled Water Rates
RFC will conduct a survey of rates in San Diego County, southern Orange County and southern Riverside
County. RFC has assisted many agencies in these areas with developing their water rates. Additionally,
RFC conducts national and California-Nevada rate surveys bi-annually and has much experience and
data.
TASK 6: CALCULATE MISCELLANEOUS FEES
RFC will also calculate the cost of providing additional services to its customers, such as fire service^
meter installations, building sprinkler supply systems, reconnection fees, etc. RFC will identify all the
costs associated with a service provided to ensure that all costs are recovered from those benefiting from
the services. RFC will develop a template that can be used to update these fees easily in the future.
TASK 7: STUDY PRESENTATIONS & MODEL TRAINING
RFC will meet with District staff and present our findings and recommendations. RFC will present the
results of our study during a work session with Council/Board prior to providing public notification of the
water rate increases. The presentation will highlight the collaborative process used to identify and
prioritize the important issues facing the District and its utilities as well as the financial policies that will
serve as framework for the financial plan. We will assist in the notification process and procedures to
ensure that the proposed rates are in compliance with Proposition 218. Following the 45-day notice
period, RFC will present the recommendation at the public hearing.
As part of this task, RFC will provide one day of training to staff in the use of the Model. The training
session will include working through realistic sample scenarios to fully prepare the staff to independently
use and update the model for fiiture analyses. RFC will continue to provide assistance beyond this
training to District staff to answer questions and clarifications on model updates.
TASK 8: PREPARATION OF RATE STUDY REPORT AND PRESENTATION TO COUNCIL
The process of developing the financial plan, the proposed rates, and other recommendations will be
described in a preliminary study Report (Report). The Report will highlight the major issues, rate design
assumptions and methodologies, used to develop the results of the study. Comments and changes from
District staff will be incorporated in the final Report, which will be refined to reflect appropriate issues or
concerns raised by stakeholders. The final Report will then be submitted to the District and will include
appropriate supporting data from tlie Model to address the requirements of Proposition 218.
Finally, RFC will present the results of the Study to City Council.
TASK 9: RATE CALCULATOR (Optional)
RFC will prepare a rate calculator that can be installed on the web. The calculator will allow customers to
calculate their bills when they identify their meter size and usage. The calculator will be developed fov
both potable and recycled water. The rate calculator can be developed in flash and delivered as a self-
contained .SWF file. Another option is to develop the calculator in JavaScript. The JavaScript option
would likely be compatible with more users, but is not as aesthetic.
TASK 10: PUBLIC OUTREACH
RFC will assist the District with public outreach to educate the customers about the changes in rates and
rates structure. RFC will prepare presentation materials in PowerPoint for the meeting and make a
presentation at the meeting. RFC can assist with preparation of notices, newspaper articles to disseminate
information regarding the rates. '
TASK 11: PREPARATION OF PROPOSITION 218 NOTICE
RFC will assist the District with preparation of a Proposition 218 notice. The notice will be reviewed by
District Counsel to ensure legal compliance.
SCHEDULE
RFC anticipates completion of the study to the oral presentation to the Council by the beginning of May
2013 starting from the notice to proceed in December 2012, with the understanding that the data needed
for the study will be available within a couple of weeks after receipt of the data request list by the District.
The proposed schedule for this study is shown below.
L 1 •)
1 - Project Initiation, Management ft Data Collection
Tntk 1 Oelhtrmblrt- OM Requttt Uit
2 - Develop Financial Objectives and Recommend Policies
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3- Financial Plan Development - '^^^
Task 3 Oellvmblft: Df aH Wttn Hi* Model ind Ricvciid Wilcr Modtl In MS bed" 2007
4 • Cost of Service
Totk 4 Mlu»nMtt. Piopestd Rfcydtd Wain Riln md Buy n Wtltr and Smrar Connacllan Fan
5 - Calculate Rates and Associated impacts ^[
Tmk SDtUvtmbIrs: Piopeitil Wataf and Racycltd Walcr Ralit and Walar ceiintctlen f*t>
6 - Calculate Miscellaneous Fees
TatkSDmU hi • W*'" ^••Modd and Kecycled Watn RalaModit in MS bcrl~ 2007, PtnnibkanMalcrialt for imKQlKHVtnUa: ^j,^ Worlnhom & Macdnt MInu et
7 - Study Presentationt & Model Training
Task ?Drnf^fpifl»s: Final Waw ilcMoilal and ftecytled Rata Mudel n MS bed" 2007 S Orah nd Final Study Raparlt
B • Preparation of Rate Study Report & Presentation to Council
Task aOtttuttrMes: PraianlaUoni matariali lor lha Public Maalini
9 - Rate Calculator • .\
TaskaOmttmablms: Rtu Calculator
10 • Public Outreach 'if
Task laiMlvmbtrv Prtiantatlon MatttiaU (or Public Out ach MMttngi
11 - Preparation of Prop 218 Notice
Ta^lXMIvmMti: Prapoiidon21aNotica
'^pX^ Kidc-off meeting Meeting with Council
Worlcsliopi-Meetings wlh Staff anifTran ng DalfveryofDnft and Final Report!
FEES
RFC will provide the tasks listed in the Scope on a time and materials basis as shown below.
Tasks 9through 11 are optional and will be billed if we perform those tasks.
C r|-Y OI- CARSI.BAl) - WAI FR COS RM b STUDY
PROPOSr.D HOURS and M ES
Task No Task Oescrfptions No of Hours Requirements Task No Task Oescrfptions Meetings SP SG FC Admin Total Total Fees
1 Project initiation. Management and Data Collection 1 20 4 12 8 44 $ 9.405
2 Devekip Financial Oblectlves and Recommend Policies 1 12 20
p
32 $ 7,265
3 Financial Plan Devetopment • Potable Water 1 16 32 48 $ 10,625
Financial Plan Devetopment - Recycled Water 2 16 18 $ 3,S80
4 Cost of Service Analysis 4 8 12 $ 2,600
5 Calculate Rates and Associated Impacts • Potable Water 1 18 32 50 $ 11,165
Calculate Rates and Associated Impacts - Recycled Water 15 24 39 $ 8,610
6 Calculate Miscellaneous Fees 2 10 12 $ 2,440
7 Study Presentations ft Model Training 2 24 24 48 $ 11,490
8 Preparation of Rate Study Report & Presentation to Council 1 20 4 56 8 88 $ 17,765
TOTAL ESTIMATED MEHINGS / HOURS 7 133 8 234 16 391
HOURLY RATES $260 $225 $180 $60 t
legend. SP Sudhir Pardlwila Total Professional fees $79,460
SG = San]ayGaur Total Expenses $5,485
FC = Steve Vuoto/Hannah Phan TOTAL FEES & EXPENSES $84,945
Optional Tasks
9 Rate Calculator 2 24 26 S S.lOO
10 Public Outreach 1 12 16 28 $ 6,505
11 Preparation of Prop 218 Notice 10 2 12 $ 3,(»0
Total Opttonal Tasks $14,685
TOTAL WITH OPTIONAL TASKS $99,630