HomeMy WebLinkAbout1995-02-14; Municipal Water District; 268; Potable Water, Reclaimed Water & Sewer Rate Study0
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hh- iICIPAL WATER DISTRICT ZENDA
,B# 0268 TITLE:
ITG. 2 -/‘?q5 Award of Contract for Potable
Water, Reclaimed Water and
IEPT. CMWD Sewer Rate Study
IECOMMENDED ACTION:
Adopt Resolution No. 895 awarding a contract to hire Montgomery Watson to
perform a rate study.
ITEM EXPLANATION:
The District has never formally conducted a water rate study. Prior to CMWD becoming
a subsidiary of the City, CMWD wholesaled water to the City, which then retailed to
customers. Since the District has become a subsidiary district of the City of Carlsbad,
the Metropolitan Water District and the San Diego County Water Authority have
implemented different financing strategies. We have experienced a prolonged drought
that has caused both Metropolitan and the Water Authority to change their policies
regarding financing plans for their capital improvement programs. Also, the District is in
need of updating its analysis of the fixed portion of its water rate versus the variable
portion. And now that the reclaimed water system is on line and expanding, an analysis
of the reclaimed water financing strategy must be performed. For these reasons, the
District has taken steps to proceed with a formal water rate study.
The overall goal of this project is to establish a comprehensive water rate structure that
will accommodate system revenue requirements and support day-to-day operations
with minimal .impacts on customers. It is expected that the study will be far enough
along that a recommended rate structure can be implemented at the beginning of fiscal
year 1995-96. The study will also provide guidance in setting rates for the following five
years.
Staff mailed a Request For Proposal (RFP) to ten firms qualified to perform this type of
study and received eight replies. Based on the evaluation criteria, the list was
narrowed to four, and a team of four staff members interviewed each of the four
agencies. As a result, Montgomery Watson was chosen as the firm that was most
responsive to the RFP and best met the evaluation criteria.
For a fee not to exceed $100,000, Montgomery Watson will provide the following
analyses as part of the rate study.
Potable Water Rates
l Per unit (commodity) charge and monthly delivery charge and the allocation
of costs between these two charges.
l Existing water use patterns of each customer classification
l Evaluation of drought penalty rate, lifeline rate, and conservation
l Evaluation of existing rates and recommendations for changes.
l Computer program model of the recommended water rate so t
update rates in the future and create “What If” scenarios.
rate
hat staff can
l Recommendations on how to incorporate flexibility into the rates to account
for outside impacts, such as actions taken by the San Diego County Water
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Page 2 of Agel tda Bill No. gbg
Authority and the Metropolitan Water District, changes in various state and
federal regulations, and potential droughts.
Reclaimed Water Rates
l Per unit (commodity) charge and monthly delivery charge, taking into account
MWD’s agricultural discount.
l Effect on potable water revenue system as reclaimed system expands.
l Evaluation of existing rates and recommendations for changes.
Sewer Rates
l An update of the sewer rate study performed by Montgomery Watson in
1989.
l Computer program model of the sewer rate so that staff can update rates in
the future and create “What If” scenarios.
Connection Fees
l Sufficiency of Major Facilities Fees to cover costs of future water delivery
needs, which correspond to the CIP.
l Recommendations for optimum method of charging connection fees.
Financing Options
l Recommendations on how to fund two large projects: lining and covering
Maerkle Reservoir and construction of Phase II of the Reclaimed Water
Master Plan.
l How to integrate capital planning with rate analysis.
l Financing for development of alternate water resources.
Cost of Delivery Analysis
As part of the overall rate study, this analysis will provide information on what it
costs to deliver water to each customer classification. This will help determine
what effects, if any, that various water rate alternatives will have on certain
customers.
Public Involvement
A significant aspect of this study will be the implementation of public participation
into the rate process. A group of ten to fifteen citizens will form a committee that
will act as an advisory committee to the staff, as well as a sounding board for
ideas and rate setting methods. Staff feels that this component of the project is
very important to the success of the study. More and more, public agencies are
involving members of the public with the goal of learning the public’s concerns,
needs and values in order to incorporate them into governmental decision-
making. It is a two-way communication process with the overall goal of making
better decisions that are supported by the public. The purpose of this facet of
the study is to inform the public, get the public’s reactions regarding proposed
actions or policies, and engage the public in problem solving to come up with the
best solution for everyone.
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Page 3 of Agenda Bill Nti a6 8
We are anticipating six to eight meetings of the citizen’s committee. The
meetings will consist of at least two background sessions to educate the
members about the District and how it functions, the San Diego County Water
Authority and the Metropolitan Water District and how these agencies affect the
District, and then the issues facing the District with regard to rates and financing.
Following this educational process, Montgomery Watson will facilitate
discussions about the various issues that we are trying to resolve. The number
of meetings is not yet certain, and will be contingent upon how quickly the
committee can come to consensus.
The composition of the citizens’ committee will be representatives of the various
customer classifications in the District’s service area, as well as members of
specific interest groups. Staff will work in conjunction with Montgomery Watson
to determine the appropriate members and will contact the groups to ask for
participant nominations. It is anticipated that there will be ten to fifteen members
on the committee.
FISCAL IMPACT:
The District budgeted $105,000 between the three enterprise funds (water, reclaimed
water and sewer) for Miscellaneous Professional Services, in anticipation of conducting
a rate study. The Montgomery Watson’s proposal is to provide the services outlined
above for a fee not to exceed $100,000. Therefore, there are sufficient funds to cover
the cost of the rate study.
EXHIBITS:
1. Resolution No. 8s S Awarding a Contract to Montgomery Watson to Perform a
Rate Study.
2. Contract between Montgomery Watson and the Carlsbad Municipal Water District to
perform a rate study.
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RESOLUTION NO. 895
A RESOLUTION OF THE BOARD OF DIRECTORS OF
THE CARLSBAD MUNICIPAL WATER DISTRICT,
CARLSBAD, CALIFORNIA, AWARDING THE CONTRACT
TO MONTGOMERY WATSON TO PERFORM A RATE STUDY
WHEREAS, the Carlsbad Municipal Water District is in need of a formal rate
;tudy; and
WHEREAS, the District staff has mailed Request For Proposals to ten qualified
irms and received eight replies; and
WHEREAS, the proposals were evaluated in accordance with the Municipal
Zode; and
WHEREAS, funds for the hiring of a firm to perform the rate-study are available
rom the water, sewer and reclaimed water operating budgets.
NOW, THEREFORE, BE IT RESOLVED, as follows:
1. That the above recitations are true and correct.
2. That Montgomery Watson best met the evaluation criteria.
3. That the President is authorized to execute the, contract attached hereto
(Exhibit 2) with Montgomery Watson Americas, Inc., to perform a rate study.
4. That the contract for a rate study is awarded to Montgomery Watson
Jmericas, Inc.
5. That an ad hoc citizens’ committee will be established for the purpose of
oroviding input to the rate setting process.
/If
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If/
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2 PASSED, APPROVED AND ADOPTED at a special meeting of the Carlsbad
3 Municipal Water District held on the 14th day of FEBRUARY , 1995,
4 by the following vote, to wit:
5 AYES: Board Members Lewis, Nygaard, Kulchin, Finnila, Hall
6 NOES: None
ABSENT: None
10 /I ATTEST:
TENKRANZ, Secretab
‘* (SEAL)
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EXHIBIT 2
AGREEMENT
THIS AGREEMENT, made and entered into as of the 21st day of
FEBRUARY , 192, by and between the CARLSBAD MUNICIPAL WATER
DISTRICT, a municipal corporation, hereinafter referred to as “District,” and
MONTGOMERY WATSON AMERICAS, INC., hereinafter referred to as “Consultant.”
RECITALS
District requires the services of a Rate Study Consultant to provide the
necessary consulting services for preparation of a comprehensive rate study; and
Consultant possesses the necessary skills and qualifications to provide the services
required by the District;
NOW, THEREFORE, in consideration of these recitals and the mutual covenants
contained herein, District and consultant agree as follows:
1. CONSULTANT’S OBLIGATIONS
a. Analysis of Potable Water Rates, to include: 1) per unit and monthly
delivery charge analysis and recommendation of cost allocations between the two
charges; 2) recommendation regarding delivery charge for multi-family dwelling units
served by a master meter and resulting charges to remaining customers; 3) evaluation
of existing water use patterns and revenues from various sources; 4) evaluation of
drought penalty rate (inclining block water rate or other mechanisms; 5)
recommendation regarding lifeline water rates.
b. Analysis of Reclaimed Water Rates, to include: 1) recommendation
regarding optimum rate for reclaimed water for both commodity and monthly fixed
rates, taking into account MWD’s agricultural discount; 2) analysis of other customer
fees to contribute to the reclaimed water fund; 3) projection of long-term effects on the
potable water revenue system as more reclaimed customers are added.
C. Analysis of Water Connection Fees (a.k.a. Major Facilities Fee), to
include: 1) sufficiency of the connection fees to cover the costs of the future water
delivery needs, which correspond to the Capital Improvement Plan; 2) presentation of
various methods of charging connection fees with a recommendation of optimum
method; 3) whether new construction connecting to existing water and sewer systems
should pay a connection fee.
d. Recommendations of financing options for 1) the lining and covering of
Maerkle reservoir, and 2) acquisition of property for and construction of an advanced
wastewater treatment plant as part of Phase II of the Reclaimed Water Master Plan. In
addition, the following issues are to be addressed: 1) how to integrate capital planning
with rate analysis and 2) how to collect funds to develop alternative water resources. --
e. Cost of Delivery Analysis
f. Public Involvement Program, to include: 1) Identification and selection of
citizens committee members; 2) six meetings with the citizens committee; 3)
preparation for meetings and final report; 4) media relations.
9 Sewer Rate Update, to include: 1) analysis of current sewer rates and
recommendations for changes; 2) public involvement .process for issues dealing with
the sewer rate.
h. Sensitivity analysis of the various fees illustrating the effects of different
methods of implementation.
i. Recommendations regarding how to incorporate flexibility into rates to
account for irregular growth, the City of Carlsbad’s Growth Management Plan, drought
impacts and changes in various state and federal regulations.
i- Deliverables to include: 1) ten copies of the draft report of rate study; 2)
25 copies of the final report of the rate study; 3) two computer rate models -- one for
water rates and one for sewer rates -- on a computer diskette in Excel 4.0 for Windows
format; and 4) written instructions on use of computer models.
2 Rev. 8/24/94
k. Training for staff on use of computer models
2. DISTRICT OBLIGATIONS
The District shall provide the necessary information required by the Consultant in
a timely fashion in order to accomplish the Consultant’s obligations stated above. The
District shall review and recommend changes to the draft report.
3. PROGRESS AND COMPLETION
The work under this contract will begin within ten (10) days after receipt of
notification to proceed by the District and be completed within 240 days of that date.
Extensions of time may be granted if requested by the Consultant and agreed to in
writing by the General Manager. The General Manager will give allowance for
documented and substantiated unforeseeable and unavoidable delays not caused by a
lack of foresight on the part of the Consultant, or delays caused by District inaction or
other agencies’ lack of timely action.
4. FEES TO BE PAID TO CONSULTANT
The total shall not exceed the fee payable according to paragraph 6, “Payment
of Fees,” and shall be $100,000. No other compensation for services will be allowed
except those items covered by supplemental agreements per Paragraph 8, “Changes in
Work.” The District reserves the right to withhold a ten percent (10%) retention until the
project has been accepted by the District.
5. DURATION OF CONTRACT
This agreement shall extend for a period of one (1) year from date thereof. The
contract may be extended by the Executive Manager for one additional one (1) year
periods or parts thereof, based upon satisfactory performance and the District’s needs.
The parties shall prepare extensions in writing indicating effective date and length of
the extended contract.
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Rev. w24/94
6. PAYMENT OF FEES
On the twelfth (12th) working day of each month, Consultant shall submit his/her
invoice for work performed during the prior month. Payment of approved items on the
invoice shall be mailed to the Consultant prior to the thirtieth (30th) day of the month
the invoice was submitted.
7. FINAL SUBMISSIONS
Within fifteen (15) days of completion and approval of the draft rate study report,
the Consultant shall deliver to the District the following items:
a. Ten (10) copies of the final rate recommendations in a bound format.
b. One computer diskette including the water rate calculation model on
EXCEL 4.0 for Windows. --
C. One computer diskette including the sewer rate calculation model on
EXCEL 4.0 for Windows.
d. Documentation explaining the two models, the data requirements and
methods to update the models.
a. CHANGES IN WORK
If, in the course of the contract, changes seem merited by the Consultant or the
District, and informal consultations with the other party indicate that a change in the
conditions of the contract is warranted, the Consultant or the District may request a
change in the contract. Such changes shall be processed by the District in the
following manner. A letter outlining the required changes shall be forwarded to the
District by Consultant to inform them of the proposed changes along with a statement
of estimated changes in charges or time schedule. A supplemental agreement shall be
prepared by the District and approved by the District according to the procedures
described in Carlsbad Municipal Code Section 3.28.172. Such supplemental
agreement shall not render ineffective or invalidate unaffected portions of the
agreement.
4 Rev. 0124i94
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9. COVENANTS AGAINST CONTINGENT FEES
The Consultant warrants that their firm has not employed or retained any
company or person, other than a bona fide employee working for the Consultant, to
solicit or secure this agreement, and that Consultant 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,
the District shall have the right to annul this agreement without liability, or, in its
discretion, to deduct from the agreement price or consideration, or otherwise recover,
the full amount of such fee, commission, percentage, brokerage fees, gift, or contingent
fee. --
10. NONDISCRIMINATION CLAUSE
The Consultant shall comply with the state and federal laws regarding
nondiscrimination.
11. TERMINATION OF CONTRACT
In the event of the Consultant’s failure to prosecute, deliver, or perform the work
as provided for in this contract, the District may terminate this contract for
nonperformance by notifying the Consultant by certified mail of the termination of the
Consultant. The Consultant, thereupon, has five (5) working days to deliver said
documents owned by the District and all work in progress to the General Manager. The
General Manager shall make a determination of fact based upon the documents
delivered to District of the percentage of work which the Consultant has performed
which is usable and of worth to the District in having the contract completed. Based
upon that finding as reported to the City Manager, the Manager shall determine the final
payment of the contract.
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12. DISPUTES
If a dispute should arise regarding the performance of work under this
agreement, the following procedure shall be used to resolve any question of fact or
interpretation not otherwise settled by agreement between parties. Such questions, if
they become identified as a part of a dispute among persons operating under the
provisions of this contract, shall be reduced to writing by the principal of the Consultant
or the District General Manager. A copy of such documented dispute shall be
fontvarded to both parties involved along with recommended methods of resolution
which would be of benefit to both parties. The District General Manager or principal
receiving the letter shall reply to the letter along with a recommended method of
resolution within ten (10) days. If the resolution thus obtained is unsatisfactory to the --
aggrieved party, a letter outlining the dispute shall be forwarded to the District Board of
Directors for their resolution through the Office of the Executive Manager. The District
Board of Directors may then opt to consider the directed solution to the problem. In
such cases, the action of the Board shall be binding upon the parties involved, although
nothing in this procedure shall prohibit the parties seeking remedies available to them
at law.
13. SUSPENSION OR TERMINATION OF SERVICES
This agreement may be terminated by either party upon tendering thirty (30)
days written notice to the other party. An the event of such suspension or termination,
upon request of the District, the Consultant shall assemble the work product and put
same in order for proper filing and closing and deliver said product to District. In the
event of termination, the Consultant shall be paid for work performed to the termination
date; however, the total shall not exceed the lump sum fee payable under paragraph 4.
The District shall make the final determination as to the portions of tasks completed and
the compensation to be made.
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Rev. 0124194
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14. STATUS OF THE CONSULTANT
The Consultant shall perform the services provided for herein in Consultant’s
own way as an independent contractor and in pursuit of Consultant’s independent
calling, and not as an employee of the District. Consultant shall be under control of the
District only as to the result to be accomplished, but shall consult with the District as
provided for in the request for proposal. The persons used by the Consultant to provide
services under this agreement shall not be considered employees of the District for any
purposes whatsoever.
The Consultant is an independent contractor of the District. The payment made
to the Consultant pursuant to the contract shall be the full and complete compensation
to which the Consultant is entitled. The District shall not make any federal or state tax
withholdings on behalf of the Consultant or his/her employees or subcontractors. The
District shall not be required to pay any workers’ compensation insurance or
unemployment contributions on behalf of the Consultant or his/her employees or
subcontractors. The Consultant agrees to indemnify the District for any tax, retirement
contribution, social security, overtime payment, unemployment payment or workers’
compensation payment which the District may be required to make on behalf of the
Consultant or any employee of the Consultant for work done under this agreement.
The Consultant shall be aware of the requirements of the Immigration Reform
and Control Act of 1986 and shall comply with those requirements, including, but not
limited to, verifying the eligibility for employment of all agents, employees,
subcontractors and consultants that are included in this agreement.
15. CONFORMITY TO LEGAL REQUIREMENTS
The Consultant shall cause all drawings and specifications to conform to all
applicable requirements of law: federal, state and local. Consultant shall provide all
necessary supporting documents, to be filed with any agencies whose approval is
necessary.
7 Rev. al24B4
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The District will provide copies of the approved plans to any other agencies.
16. OWNERSHIP OF DOCUMENTS
All plans, studies, sketches, drawings, reports, and specifications as herein
required are the property of the District, whether the work for which they are made be
executed or not. In the event this contract is terminated, all documents, plans,
specifications, drawings, reports, and studies shall be delivered forthwith to the District.
Consultant shall have the right to make one (1) copy of the plans for his/her records.
17. REPRODUCTION RIGHTS
The Consultant agrees that all copyrights which arise from creation of the work
pursuant to this contract shall be vested in District and hereby agrees to relinquish all
claims to such copyrights in favor of District. --
ia. HOLD HARMLESS AGREEMENT
The District, its officers, and employees shall not be liable for any claims,
liabilities, penalties, fines or any damage to goods, properties, or effects of any person
whatever, nor for personal injuries or death caused by, or resulting from, any intentional
or negligent acts, errors or omissions of Consultant or Consultant’s agents, employees,
or representatives. Consultant agrees to defend, indemnify, and save free and
harmless the District and its officers and employees against any of the foregoing
claims, liabilities, penalties or fines, including liabilities or claims by reason of alleged
defects in any plans and specifications, and any cost, expense or attorney’s fees which
are incurred by the District on account of any of the foregoing.
19. ASSIGNMENT OF CONTRACT
The Consultant shall not assign this contract or any part thereof or any monies
due thereunder without the prior written consent of the District.
20. SUBCONTRACTING
If the Consultant shall subcontract any of the work to be performed under this
contract by the Consultant, Consultant shall be fully responsible to the District for the
8 Rev. 8I241’94
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acts and omissions of Consultant’s subcontractor and of the persons either directly or
indirectly employed by the subcontractor, as Consultant is for the acts and omissions of
persons directly employed by Consultant. Nothing’ contained in this contract shall
create any contractual relationship between any subcontractor of Consultant and the
District. The Consultant shall bind every subcontractor and every subcontractor of a
subcontractor by the terms of this contract applicable to Consultant’s work unless
specifically noted to the contrary in the subcontract in question approved in writing by
the District.
21. PROHIBITED INTEREST
No official of the District who is authorized in such capacity on behalf of the
District to negotiate, make, accept, or approve, or take part in negotiating, making, --
accepting, or approving of this agreement, shall become directly or indirectly interested
personally in this contract or in any part thereof. No officer or employee of the District
who is authorized in such capacity and on behalf of the District to exercise any
executive, supervisory, or similar functions in connection with the performance of this
contract shall become directly or indirectly interested personally in this contract or any
part thereof.
22. VERBAL AGREEMENT OR CONVERSATION
No verbal agreement or conversation with any officer, agent, or employee of the
District, either before, during or after the execution of this contract, shall affect or modify
any of the terms or obligations herein contained nor entitle the Consultant to any
additional payment whatsoever under the terms of this contract.
23. SUCCESSORS OR ASSIGNS
Subject to the provisions of Paragraph 18, “Hold Harmless Agreement,” all
terms, conditions, and provisions hereof shall inure to and shall bind each of the parties
hereto, and each of their respective heirs, executors, administrators, successors, and
assigns.
9 Rev. W241’94 I i
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24. EFFECTIVE DATE
This agreement shall be effective on and from the day and year first written
above.
25. CONFLICT OF INTEREST
The District has determined, using the guidelines of the Political Reform Act and
the District’s conflict of interest code, that the Consultant will not be required to file a
conflict of interest statement as a requirement of this agreement. However, Consultant
hereby acknowledges that Consultant has the legal responsibility for complying with the
Political Reform Act and nothing in this agreement releases Consultant from this
responsibility.
26. INSURANCE --
The Consultant shall obtain and maintain policies of general liability insurance,
automobile liability insurance, and a combined policy of worker’s compensation and
employers liability insurance from an insurance company authorized to do business in
the State of California which meets the requirements of City Council Resolution No. 91-
403 in an insurable amount of not less than one million dollars ($1 ,OOO,OOO) each,
unless a lower amount is approved by the City Attorney or the City Manager. This
insurance shall be in force during the life of this agreement and shall not be canceled
without thirty (30) days prior written notice to the District sent by certified mail.
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Executed by Consultant this 12TH day of JANUARY ,1995 .
CONSULTANT:
MONTGOMERY WATSON
CARLSBAD MUNICIPAL WATER
DISTRICT, a municipal corporation
By:
ATTEST:
LEE ALDRIDGE
(print name here)
VICE PRESIDENT
MONTGOMERY WATSON AMERICAS, INC.
(title and organization of signatory)
Secretary
(Proper notarial acknowledgment of execution by CONSULTANT must be attached.)
(President or vice-president and secretary or assistant secretary must sign for
corporations. If only one officer signs, the corporation must attach a resolution certified
by the secretary or assistant secretary under corporate seal empowering that officer to
bind the corporation.)
APPROVED AS TO FORM:
District Legal Counsel .’
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CALIFORNIA Al-L-PURPOSE ACKNOWLEDGMENT NO 5907
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County of j’- J&c*
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On before me,
DATE
personally appeared
NAME. TITLE OF OFFICER . E.G “JANE WE. NOTAR
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SAME(S) OF SIGNER(S)
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g personally known to me - OR - q proved to me on the basis of satisfactory evidence
to be the person#$whose namefl is&e-
subscribed to the within instrument and ac-
knowledged to me that heM&hey-executed .- --. ),-, -;;;,c-%wMw +. authorized
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or the entity upon behalf of which the i .- f.~~.yqF-y. ~l.-e~C personficted, executed the instrument.
-- WITNESS my hand and official seal.
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SIGNATURE OF NOTARY
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent
fraudulent reattachment of this form.
CAPACITYCLAIMEDBYSIGNER DESCRIPTIONOFATTACHEDDOCUMENT
0 INDIVIDUAL
0 CORPORATE OFFICER
TITLE(S)
0 PARTNER(S) 0 LIMITED
0 GENERAL q ATTORNEY-IN-FACT
0 TRUSTEE(S)
; z;;W;fANKONSERVATOR
TITLE OR TYPE OF DOCUMENT
NUMBER OF PAGES
. .
DATE OF DOCUMENT
SIGNER IS REPRESENTING:
NAME OF PtRSON(S) OR ENTITY(IES)
SIGNER(S) OTHER THAN NAMED ABOVE
01993 NATIONAL NOTARY ASSOCIATION l 6236 Remmet Ave.. P.O. Box 7184 l Canoga Park, CA 91 X39-7 184