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HomeMy WebLinkAboutItem F� seal AGENDA STAFF REPORT �~+ DATE: December 11, 2017 TO: Honorable Mayor and City Council THRU: Jill Ingram, City Manager FROM: Steve Myrter P.E., Director of Public Works SUBJECT: AUTHORIZATION FOR THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT WITH NBS FOR THE 2017 WATER AND SEWER RATE STUDY SUMMARY OF REQUEST: That the City Council adopt Resolution No. 6777 authorizing the City Manager to execute a professional services agreement for the 2017 Water and Sewer Rate Study with NBS in the amount not to exceed $42,440. BACKGROUND: On February 23, 2015, the City Council approved a professional services agreement to NBS for the 2015 Water and Sewer Rate Study for $67,925 with a one year tens. (See attachment B) The City periodically adjusts rates for each of the water and sewer enterprises based upon the cost of service. A rate study was largely overdue, due to the last water rates being adopted in 2010 and the sewer rates in 2005. Many contributing factors to delivering water and sewer services to the entire City have increased since 2005 and 2010 respectively. Nearing the completion of the draft rate study, staff decided to postpone the study based upon the Sewer Master Plan Update, which was awarded at the November 9, 2015 City Council meeting. The Sewer System Master Plan is being reviewed by staff and is nearing completion. With both the rate study and sewer reports working concurrently, it was determined to conclude the rate study after the sewer reports' findings and recommendations were completed. The sewer reports will provide the City a 10 year Capital Improvement Program and provide additional operations and maintenance to the sewer enterprise. These recommendations will be applied to the sewer rate portion of the study. Agenda Item F Page 2 The City has spent $53,908.46 to NBS from the awarded contract cost of $67,925. The $53,908.46 of expenditures completed most of the task items from the original cost proposal except for the mailings and some public presentations. $14,016.54 still remains in the contract. The contract had a tern limit of one year which commenced on February 23, 2015 and has expired. NBS has submitted the attached proposal dated October 26, 2017 to update the completed task items with current figures, informational mailers and public presentations for $42,440 as Attachment D. This update will also include incorporating the latest sewer recommendations, recent water capital improvement projects changes and the added operations and maintenance needs to the sewer and water functions. By applying the remaining funds of $14,016.54 from the existing awarded amount to the October 26, 2017 proposal, only $28,423.46 of additional funding is requested. ENVIRONMENTAL IMPACT: The Water and Sewer Rate Study is exempt from the California Environmental Quality Act ("CEQA") pursuant to Section 15601(b)(3) of the State CEQA Guidelines because it can be seen with certainty that there is no possibility that the study will have a significant effect on the environment. LEGAL ANALYSIS: The City Attorney has approved the professional services agreement and proposed resolution as to form. FINANCIAL IMPACT: In the approved FY 2017/18 Budget, $137,000 has been allocated for the water and sewer rate study. Below is a breakdown on the funding sources. Fund Amount Fund 019— Water Capital Fund (WT1501) $73,000 Fund 044 — Sewer Caoital Fund (SS1401) $64.000 TOTAL $137,000 NBS has submitted the attached proposal dated October 26, 2017 for $42,440 to complete the water and sewer rate study and to reflect new billing rates. There is no impact to the General Fund. Page 3 RECOMMENDATION: That the City Council adopt Resolution No. 6777 authorizing the City Manager to execute a professional services agreement for the 2017 Water and Sewer Rate Study with NBS in the amount not to exceed $42,440. SUBMITTED BY: Stevd`WyffLkF P.E. Director of Public Works NOTED AND APPROVED: Prepared by: Michael Ho, P.E., Dep. Dir. PW/City Engineer Attachments: A. Resolution No. 6777 B. Existing 2015 NBS Professional Services Agreement C. Proposed NBS Professional Services Agreement D. NBS Proposal dated October 26, 2017 re Contract Amendment to the Water and Sewer Rate Study Agreement Attachment "A" RESOLUTION NUMBER 6777 A RESOLUTION OF THE SEAL BEACH CITY COUNCIL AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT WITH NBS GOVERNMENT FINANCE GROUP DBA NBS FOR THE 2017 WATER AND SEWER RATE STUDY AND AUTHORIZING THE CITY MANAGER TO EXECUTE SAME THE SEAL BEACH CITY COUNCIL DOES HEREBY RESOLVE SECTION 1. The City Council hereby approves Professional Services Agreement between the City of Seal Beach and NBS Government Finance Group dba NBS ("NBS') , for the 2017 Water and Sewer Rate Study total contract amount of not to exceed $42,440. SECTION 2. The City Council hereby authorizes and directs the City Manager to execute the Professional Services Agreement between the City of Seal Beach and NBS, and all related documents, on behalf of the City. PASSED, APPROVED and ADOPTED by the Seal Beach City Council at a regular meeting held on the t t'day of December, 2017 by the following vote: AYES: Council Members: NOES: Council Members: ABSENT: Council Members: ABSTAIN: Council Members: Mayor, Sandra Massa-Lavitt ATTEST: Robin L. Roberts, City Clerk STATE OF CALIFORNIA } COUNTY OF ORANGE } SS CITY OF SEAL BEACH } I, Robin L. Roberts, City Clerk of the City of Seal Beach, do hereby certify that the foregoing resolution is the original copy of Resolution Number 6777 on file in the office of the City Clerk, passed, approved, and adopted by the Seal Beach City Council at a regular meeting held on the 11'" day of December, 2017. Robin L. Roberts, City Clerk Attachment "B" PROFESSIONAL SERVICES AGREEMENT for Water and Sewer Rate Study Between City of Seal Beach 211 - 8th Street Seal Beach, CA 90740 0 NBS 32605 Temecula Parkway Temecula, CA 92562 This Professional Service Agreement ("the Agreement') is made as of February 23, 2015 (the "Effective Date'), by and between NBS ("Consultant'), a California Corporation, and the City of Seal Beach ("City"), a California charter city, (collectively, 'the Parties'). doc RECITALS A. City desires certain professional services B. Consultant represents that it is qualified and able to provide City with such services. NOW THEREFORE, in consideration of the Parties' performance of the promises, covenants, and conditions stated herein, the Parties hereto agree as follows. AGREEMENT 1.0 Scope of Services 1.1. Consultant shall provide those services ("Services") set forth in the attached Exhibit A, which is hereby incorporated by this reference. To the extent that there is any conflict between Exhibit A and this Agreement, this Agreement shall control. 1.2. Consultant shall perform all Services under this Agreement in accordance with the standard of care generally exercised by like professionals under similar circumstances and in a manner reasonably satisfactory to City. 1.3. In performing this Agreement, Consultant shall comply with all applicable provisions of federal, state, and local law. 1.4. Consultant will not be compensated for any work performed not specified in the Scope of Services unless the City authorizes such work in advance and in writing. The City Manger may authorize extra work to fund unforeseen conditions up to the amount approved at the time of award by the City Council. Payment for additional work in excess of this amount requires prior City Council authorization. 2.0 Term This term of this Agreement shall commence as of the Effective Date and shall continue for a term of 1 year unless previously terminated as provided by this Agreement. 3.0 Consultant's Compensation City will pay Consultant in accordance with the hourly rates shown on the fee schedule set forth in Exhibit B for Services but in no event will the City pay more than $ 67.925. Any additional work authorized by the City pursuant to Section 2of9 .doc 1.4 will be compensated in accordance with the fee schedule set forth in Exhibit B. 4.0 Method of Payment 4.1. Consultant shall submit to City monthly invoices for all services rendered pursuant to this Agreement. Such invoices shall be submitted within 15 days of the end of the month during which the services were rendered and shall describe in detail the services rendered during the period, the days worked, number of hours worked, the hourly rates charged, and the services performed for each day in the period. City will pay Consultant within 30 days of receiving Consultant's invoice. City will not withhold any applicable federal or state payroll and other required taxes, or other authorized deductions from payments made to Consultant. 4.2. Upon 24-hour notice from City, Consultant shall allow City or City's agents or representatives to inspect at Consultant's offices during reasonable business hours all records, invoices, time cards, cost control sheets and other records maintained by Consultant in connection with this Agreement. City's rights under this Section 4.2 shall survive for two years following the termination of this Agreement. 5.0 Termination 5.1. This Agreement may be terminated by City, without cause, or by Consultant based on reasonable cause, upon giving the other party written notice thereof not less than 30 days prior to the date of termination. 5.2. This Agreement may be terminated by City upon 10 days' notice to Consultant if Consultant fails to provide satisfactory evidence of renewal or replacement of comprehensive general liability insurance as required by this Agreement at least 20 days before the expiration date of the previous policy. 6.0 Party Representatives 6.1. The City Manager is the City's representative for purposes of this Agreement. 6.2. Greg Crumpler is the Consultant's primary representative for purposes of this Agreement. 7.0 Notices 7.1. All notices permitted or required under this Agreement shall be deemed made when personally delivered or when mailed 48 hours after deposit 3of9 37296-MM2366080 dm in the United States Mail, first class postage prepaid and addressed to the party at the following addresses: To City: City of Seal Beach 211 -8th Street Seal Beach, California 90740 Atm: City Manager To Consultant: NBS 32605 Temecula Parkway, Suite 100 Temecula, CA 92592 Attn: Michael Rentner, President & CEO 7.2. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. 8.0 Independent Contractor 8.1. Consultant is an independent contractor and not an employee of the City. All services provided pursuant to this Agreement shall be performed by Consultant or under its supervision. Consultant will determine the means, methods, and details of performing the services. Any additional personnel performing services under this Agreement on behalf of Consultant shall also not be employees of City and shall at all times be under Consultant's exclusive direction and control. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance. 8.2. Consultant shall indemnify and hold harmless City and its elected officials, officers, employees, servants, designated volunteers, and agents serving as independent contractors in the role of City officials, from any and all liability, damages, claims, costs and expenses of any nature to the extent arising from Consultant's personnel practices. City shall have the right to offset against the amount of any fees due to Consultant under this Agreement any amount due to City from Consultant as a result of Consultant's failure to promptly pay to City any reimbursement or indemnification arising under this Section. 9.0 Subcontractors No portion of this Agreement shall be subcontracted without the prior written approval of the City. Consultant is fully responsible to City for the performance of any and all subcontractors. 4of9 572960001\1236808x1 doc 10.0 Assignment Consultant shall not assign or transfer any interest in this Agreement whether by assignment or novation, without the prior written consent of City. Any purported assignment without such consent shall be void and without effect. 11.0 Insurance 11.1. Consultant shall not commence work under this Agreement until it has provided evidence satisfactory to the City that Consultant has secured all insurance required under this Section. Consultant shall furnish City with original certificates of insurance and endorsements effecting coverage required by this Agreement on fors satisfactory to the City. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on fors provided by the City if requested. All certificates and endorsements shall be received and approved by the City before work commences. The City reserves the right to require complete, certified copies of all required insurance policies, at any time. 11.2. Consultant shall, at its expense, procure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of this Agreement. Insurance is to be placed with insurers with a current A.M. Best's rating no less than A:VIII, licensed to do business in California, and satisfactory to the City. Coverage shall be at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence for CG 0001); (2)Automobile Liability: Insurance Services Office Business Auto Coverage for number CA 0001, code 1 (any auto); and, if required by the City, (3) Professional Liability. Consultant shall maintain limits no less than: (1) General Liability: $2,000,000 per occurrence for bodily injury, personal injury and property damage and if Commercial General Liability Insurance or other for with a general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreementllocation or the general aggregate limit shall be twice the required occurrence limit; (2) Automobile Liability: $1,000,000 per accident for bodily injury and property damage; and (3) Professional Liability: $1,000,000 per claim/aggregate. 11.3. The insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms supplied or approved by the City to state: (1) coverage shall not be suspended, voided, reduced or canceled except after 30 days prior written notice by certified mail, return receipt requested, has been given to the City; (2) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the City, its directors, officials, officers, (3) coverage shall be primary insurance as respects the City, its directors, officials, officers, 5of9 57296-0001 V 2368080.doc employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the Consultant's scheduled underlying coverage and that any insurance or self-insurance maintained by the City, its directors, officials, officers, employees, agents and volunteers shall be excess of the Consultant's insurance and shall not be called upon to contribute with it; (4) for general liability insurance, that the City, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the services or operations performed by or on behalf of the Consultant, including materials, parts or equipment furnished in connection with such work; and (5) for automobile liability, that the City, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Consultant or for which the Consultant is responsible. 11.4. All insurance required by this Section shall contain standard separation of insureds provisions and shall not contain any special limitations on the scope of protection afforded to the City, its directors, officials, officers, employees, agents, and volunteers. 11.5. Any deductibles or self-insured retentions shall be declared to and approved by the City. Consultant guarantees that, at the option of the City, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its directors, officials, officers, employees, agents, and volunteers; or (2) the Consultant shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses. 12.0 Indemnification, Hold Harmless, and Duty to Defend Consultant shall defend, indemnify, and hold the City, its officials, officers, employees, volunteers and agents serving as independent contractors in the role of city officials (collectively "Indemnitees") free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any acts or omissions of Consultant, its employees, or its agents in connection with the performance of this Agreement, including without limitation the payment of all consequential damages and attorneys' fees and other related costs and expenses, except for such loss or damage arising from the sole negligence or willful misconduct of the City. With respect to any and all such aforesaid suits, actions, or other legal proceedings of every kind that may be brought or instituted against Indemnitees, Consultant shall defend Indemnitees, at Consultant's own cost, expense, and risk, and shall pay and satisfy any judgment, award, or decree that may be rendered against Indemnitees. Consultant shall reimburse City and its directors, officials, officers, employees, agents and/or volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity 6of9 S729640001112366o6v1.doc herein provided. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by Consultant, the City, its directors, officials, officers, employees, agents or volunteers. All duties of Consultant under this Section shall survive termination of this Agreement. 13.0 Equal Opportunity Consultant affirmatively represents that it is an equal opportunity employer. Consultant shall not discriminate against any subcontractor, employee, or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex, sexual orientation, or age. Such non-discrimination includes, but is not limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff, or termination. 14.0 Labor Certification By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code that require every employer to be insured against liability for Workers' Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services. 15.0 Entire Agreement This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings, or agreements. This Agreement may only be modified by a writing signed by both parties. 16.0 Severability The invalidity in whole or in part of any provisions of this Agreement shall not void or affect the validity of the other provisions of this Agreement. 17.0 Governing Law This Agreement shall be governed by and construed in accordance with the laws of the State of California. 18.0 No Third Party Rights No third party shall be deemed to have any rights hereunder against either party as a result of this Agreement. 7of9 S7z9e-000rizsse0avr eon 19.0 Waiver No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a party shall give the other party any contractual rights by custom, estoppel, or otherwise. 20.0 Prohibited Interests; Conflict of Interest 20.1. Consultant covenants that it presently has no interest and shall not acquire any interest, direct or indirect, which may be affected by the Services, or which would conflict in any manner with the performance of the Services, Consultant further covenants that, in performance of this Agreement, no person having any such interest shall be employed by it. Furthermore, Consultant shall avoid the appearance of having any interest, which would conflict in any manner with the performance of the Services. Consultant shall not accept any employment or representation during the term of this Agreement which is or may likely make Consultant "financially interested" (as provided in California Government Code §§1090 and 87100) in any decision made by City on any matter in connection with which Consultant has been retained. 20.2. Consultant further warrants and maintains that it has not employed or retained any person or entity, other than a bona fide employee working exclusively for Consultant, to solicit or obtain this Agreement. Nor has Consultant paid or agreed to pay any person or entity, other than a bona fide employee working exclusively for Consultant, any fee, commission, gift, percentage, or any other consideration contingent upon the execution of this Agreement. Upon any breach or violation of this warranty, City shall have the right, at its sole and absolute discretion, to terminate this Agreement without further liability, or to deduct from any sums payable to Consultant hereunder the full amount or value of any such fee, commission, percentage or gift. 20.3. Consultant warrants and maintains that it has no knowledge that any officer or employee of City has any interest, whether contractual, non - contractual, financial, proprietary, or otherwise, in this transaction or in the business of Consultant, and that if any such interest comes to the knowledge of Consultant at any time during the term of this Agreement, Consultant shall immediately make a complete, written disclosure of such interest to City, even if such interest would not be deemed a prohibited "conflict of interest" under applicable laws as described in this subsection. 21.0 Attomeys' Fees If either party commences an action against the other party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from 8of9 S7295 -0001i2358080 dm the losing party all of its attorneys' fees and other costs incurred in connection therewith. 22.0 Exhibits All exhibits referenced in this Agreement are hereby incorporated into the Agreement as if set forth in full herein. In the event of any material discrepancy between the terms of any exhibit so incorporated and the terms of this Agreement, the terms of this Agreement shall control. 23.0 Corporate Authority The person executing this Agreement on behalf of Consultant warrants that he or she is duly authorized to execute this Agreement on behalf of said Party and that by his or her execution, the Consultant is formally bound to the provisions of this Agreement. IN WITNESS WHEREOF, the Parties hereto, through their respective authorized representatives have executed this Agreement as of the date and year first above written. CITY OF SEAL BEACH CONSULTANT By: By: Ji R. Ingram, City Y±qager Name: Michael Rentner Attest: By: 7'Vwti' K -#%r Tina Knapp, City Clerk Approved as to Form: By: Ste n . Flows , City Attorney 51296-0001\12368080 dcc Its: President By: Name: Michael Rentner Its: Secretary 9of9 SCOPE OF SERVICES We plan on providing the leadership in helping City staff, City Council members and the public understand the various options, key issues, and how other California communities are addressing similar problems Ultimately, we want the City to be confident that it Is taking reasonable and prudent steps and developing rates and fees that best meet the needs of the City's customers. This section details NBS' proposed methodology and scope of work These tasks serve as the basis for the proposed budget and can be incorporated into the formal agreement to perform this rate study TASK 1. KICKOFF MEETING AND DATA COLLECTION Task Objectives: Cleary communicate and work with City staff to obtain necessary data and review study objectives, tasks, and schedule. Task Delirerables: • Data request to City staff prior to the kickoff meeting • Review of Initial data provided • Kick-off meeting with City staff • Preliminary plan for Public Outreach workshops and City Council presentations. The kickoff meeting will be used to review and discuss the data from the City's billing and accounting system and data requirements in general. The data the City will need to provide includes customer amounts, meter sizes, monthly consumption records for each customer, total rate revenue collected, and financial data typically reported in financial statements TASK 2. REVIEW OF CURRENT RATES AND POLICIES Task Objectives: Work with City staff to review and evaluate the City's current rate structures, reserve funds, and related policies at the beginning of the study. This will help set the direction for the study with a greater degree of clarity and avoid unnecessary complications when the final results are presented to the Council and public For example, policies related to basic equity and fairness, revenue stability vs water conservation, drought -related supply reductions, reserve fund targets and the level of funding for capital and repair and replacement costs Task Deliverables: • Assessment of current reserve funds and target year-end balances. • Assessment of current rate structures (pros and cons, areas for improvement, etc.) • Assessment of equity of the rates for the various customer Gasses • Assessment of conservation impacts (current rates and potential new rate designs) • Assessment of current rate -related policies compared to industry practices and how they may relate to possible rate alternatives • Summary of pros d cons of current and alternative policies • Recommendations for changes to and/or additional policies for the Council to consider adopting, as well as a greater degree of direction on rate alternatives for further evaluation TASK 3. FINANCIAL PLAN AND REVENUE REQUIREMENT ANALYSIS Task Objectives: Prepare a detailed financial plan that details the City's revenues, expenditures, reserves, debt coverage ratios, capital improvement costs, repair and replacement costs and net revenue requirements. Based on our review of reserve fund policies, those changes will be incorporated into the financial plans in order to better evaluate the City's current financial management concems Task Deliverables: • 20 -year financial projection models that will serve as a financial "roadmaps" for the City's water and sewer utilities • Summary of current and pmjected net revenue requirements • Establish reserve fund policies and targets, such as operating, rete stabilization, capital repair and replacement and debt service. • Projected year-end reserve fund levels. • Calculated debt service coverage ratios These financial plans will lay the groundwork for the cost -of -service and rate design analyses addressed in Tasks 4 and 5. The following subtasks are anticipated: • projected Revenues and Expenditures — Using a cash -basis reflecting the City's system of accounts for the water and sewer utilities, NBS will prepare a 20 -year projection of revenues and expenses for each ublity, and Increases In rate revenue needed to meet all obligations This will provide the City with the financial planning tools needed for smoothing out future rate increases and maintaining appropriate reserve fund levels in light of revised budget projections. • Evaluate Reserve Fund Sufficiency — NBS will evaluate the sufficiency of existing reserve funds and related issues such as debt service coverage ratios We will provide recommendations for target balances for reserves such as operating, capital rehabilitabordreplacement and rale stabilization • Review Capital Improvement Funding — NBS will incorporate the capital improvement plans, and evaluate the timing, costs, and available reserves used to fund various projects We will work with City staff to develop a well -conceived approach to funding these capital needs Figures 2, 3 and 4 are eg nenc examples of the types of charts and tables we use to summarize these results (the City's chart of accounts will serve as the basis for the actual analysis and tables) Figure 2. Summary of Five -Year Revenue Requirements and Rate Increases I IM1WsusedC&smeabrcoverapecDlcukfrtmp+N 2 Tnlel UDDd FunGs W5 nw+aa ttYMUPS dntlmfamsl edmFl9.s 7ha1✓5 b ll,a Sour Of MW Funds RenuUderFwinRg Noe-Rab Revenuva 06 599.330 5,315,70 635.770 ,429,56 8 600.769 598,485 575SM 9 571.953 6Rb 571,9m E 15,602,9M $16,961,475 E 16,030,35$ $10.122,"1 $16,257.107 $16,400,308 Taal Source9 of Funs Um of waM Furry Oponfing Eq nses $ 12,791,032 613,197,960 $ 13,312,000 613,813,880 $14,928,296 $15,546,000 Ii Service 498,606 489,138 488,662 490,108 492,153 463,855 Rai n009aoibl EmMW 3515.232 7310.656 5620.5" 5,217,171 4,346899 613,269,6" Total U. of Funs $17,202,330 621,111,35 619,924,52 520,637,820 SM366,754 Addihorel Rnenue from Rab Increases 765,785 1,581,533 ZA0,511 3,561,624 4,585.472 S I�(0atki• )).a11er Rate lnwae E 2,51 318 $ 405,070) ) $ 3,4999,442200) $(1,351,5 (818,890) 5) E $ 85,028 YWIaYa'S,111/„S-LW'LNLL]„aeL OMPL'LW DY'H'l am @M Dobf Courage After Rate Increase' 425 130 130 130 130 130 I IM1WsusedC&smeabrcoverapecDlcukfrtmp+N 2 Tnlel UDDd FunGs W5 nw+aa ttYMUPS dntlmfamsl edmFl9.s 7ha1✓5 b ll,a Fioure 3. Summary of Five -Year Reserve Fund Balances figure 4. Summary of Revenue Requirements and Existing vs. Proposed nate Water Revenue Requirements vs. Revenue Under Existing and Increased Rates I st4aw,00a � — • �•-•— sum,wa — — — — — KOM,Ow I — — oRN x Reserve Fundal LaPltal EBMnees e�[lebt Sanies ee�0" Expenses se,ew,wo Revenues; under Dusling Rales — e oevvenues under Increased Retr r0 3013 M11 Me w9 AST Me Me 10M 3011 1033 TASK 4. COST OF SERVICE ANALYSIS Task Ob%ecrives: Equitably allocate the revenue requirements to each customer UasS and determine the cost of providing water service to each of these classes Task Delheerables: Cost of service summary tables, to be incorporated Into the rate design and rate study report. This analysis provides a critical component necessary for establishing a defensible administrative record for cost -based water rates 4.1 Cost of Service Analysis (Water) Operating Reserve S .0 1108LD S 586,1]3 5 1,]81660 s 1.938.000 5 1605.258 5 2,u95Recommended Maes. Target i, 7781.000 1,659,.0 1,938.000 2,015.000 2095000S 1.7426,10o E 1,372,500 E 1,952,055 $ 1,336,2. E 1,7]7,50] Recanmended Mvemun Tai 1.54219.100 1,372,500 1,320.100 1,736.200 1.209,300 Dan Reserve S 5536,969 $ 536,949 5 5%,909 5 536,919 S 536.949 Minimum Target 3536,949 536.999536.949 535949 576949 0I]L um aT11IRecommenrlad Minimum Target S 7,",049 $ 3767,"9 S 3.795.M E 3,886,149 $ 3,881,249 figure 4. Summary of Revenue Requirements and Existing vs. Proposed nate Water Revenue Requirements vs. Revenue Under Existing and Increased Rates I st4aw,00a � — • �•-•— sum,wa — — — — — KOM,Ow I — — oRN x Reserve Fundal LaPltal EBMnees e�[lebt Sanies ee�0" Expenses se,ew,wo Revenues; under Dusling Rales — e oevvenues under Increased Retr r0 3013 M11 Me w9 AST Me Me 10M 3011 1033 TASK 4. COST OF SERVICE ANALYSIS Task Ob%ecrives: Equitably allocate the revenue requirements to each customer UasS and determine the cost of providing water service to each of these classes Task Delheerables: Cost of service summary tables, to be incorporated Into the rate design and rate study report. This analysis provides a critical component necessary for establishing a defensible administrative record for cost -based water rates 4.1 Cost of Service Analysis (Water) The revenue requirements will be equitably allocated to individual customer classes based on industry standard methodologies We will review the City's existing customer classes and analyze the historical characteristic of each customer class to determine 9 any changes should be made, in order to comply with industry standards If there are any changes to the customer classes resulting from the review of the current rate structures and customer characteristics (i e., incorporating differential rates for single-, multi -family and commercial, etc ), these changes will be incorporated into this analysis. The main components of the cost-of- sennee analysis are as follows' FunctionalizationlClassificadon of Expenses — Funchonallzing the expenses means arranging costs into basic categories, such as source of supply, treatment, transmission, and distribution, as well as adminlstrahve and overhead costs. Once the costs have been functionalized, they are then classified to their various cost components, such as fixed capacity, variable (commodity), or customer related costs, as illustrated in Figure 5. Figure S. Classification of Water Revenue Requirements Allocation of Costs to Customer Classes — These costs are then allocated to individual customer Gasses based on allocation factors specific to each cost classification, producing fixed and variable revenue regmrements for each customer class These allocations will be used for the actual rate calculations Figure 6 describes the allocation factors that will be developed in this phase of the analysis and used to allocate costs Figure 6. Example of Allocation Factors Allocation Patton Water Comumplion by I Peak Watw Vae hixnber of Ac " Cmtomer Class t by Cmtomar Chis f COa1364W/alap'w,M fhB lCalaeMTQ4rMLaf cola PplNmama: (.'O.YE dadCGBIAI wiM hdnnp TYPn WCoals Crnwlmwlm NwNwovernma wfhemaaimwnsreNMaanas icmramers ronrottao roma syabm reWaed m meNlMs hmaM •Venable CUN ofPwtllased wa(N' Pffm�jy •Wawofpp Mcllnea •MNw eeaNlp Examplesof Cosh• •el tl •FxMceMOlpurcheeaO weM .Gusryaareillirq •CMmecNs .Cusbmr Semce As a result of applying the allocation factors to the cost classifications, the revenue required from each customer class is accumulated by customer class, as shown In Figure 7 Figure 7. Allocation of Revenue Requirements to Customer Classes 4.2 Cost of Service Analysis (Sewer) This task identifies some of the differences In the technical analysis necessary for equitably allocahng sewer revenue requirements to each of the customer classes Sewer Classification of Expenses — Classifying expenses involves arranging costs into basic categories, including Bow and strength charactenstics (i.e, BOD and TSS), as well as customer costs Figure 8 illustrates this process NBS used for the City of Culver Cay. Figure 8. Classification of Sewer Revenue Requirements Budget Cate,deles Fl. Strength Custmvr Regular Seines S 346 Bao f 336,618 E 126,982 S 135,902 S 253.96] 409'0 15% 15% 30% RelA13erl 5 131,715 f 53,606 E 20.20] S ID,ID7 f 43,415 00% 15% 15% 30% G., Ir.e.e. E 151,151 5 80,062 S 22,673 S 22,673 $ 45,345 40% 15% 15% 3D% P i 231,951 $ 33.903 E 35.211 S 35,114 $ 70,407 10if 16% 15% 30% Tani ftnexrve Mrv,uE S 1M]3M 1 S 545" f 2061% f 201,106 f 410,211 aterism.a Opedinexed,- Ibbs S 13.300 E W.,100 E -1; - f 7,rpo 90% O% 36f 1011 Cmlemme, WA,... (11 S 2,2!;300 E 1.272.320 E 52!.530 3 47].120 E - 6816 23% 21% 0% RmIal Oland 5 300.000 S 324,000 $ E - S M.000 N% 0% 0% 10% Other OW,dertual Se'e. $ 733.310 5 350,930 S S S 73.332 E311 01f 0% 1015 Msc Odw Expenses $ 394306 $ 198 d03 E 37,450 S 2)14M E 143.002 53% ]50 TA 33% Admm3veteech es s 653451 f 65518 E S f 569.936 10% 09f 0% 909f TnMIMalnbeEnu SO ralbm f 4,01,105 f 2MMIM 1 $ 590.010 $ 6)3 S MAN TOkl 0W&ft EdmSWi $ 43M,47E S 3JAM4 f 73;113 S 709,37E S 1,264OM Affwar0Od O1O aNngE x00% S2% M 12]t 22% OrM91keeP x1G 2011 Sa1n S t,fiM,930 S 100 3 101,200 f 401.]0(1 3 50% 26% 251f O% OF SMINs FUN TOM USES OF SEVER FUNDS S .TMS S 99 3 11 i6 1,11t,5ri S 1 ON !pA 16% te% 176 Lm NO ah Revenaeb SS% 13% -IRM Ikea) 9ldurtaal wasteeup.h. ices S (70,011) E (3],42) E (9.0221 E (a,OM1 S 115.053) less .1.1 Earmn s S 202.000 f 103,04 3 23335 E 11A'N 5 4],4M 50% 13% 12% 22% NET REVENUE REOT5(Un luted) I S ],1912]3 f 3,)91,316 f 1,121,757 S 1,0]8,4% f 1,201,6]9 Allocations to Sewer Customer Classes — The next step in the cost -of -service analysis Is allocating the sewer costs to each of the customer classes using the allocation factors for each of the classes of costs, which are shown In Figure 9 Figure 9. Example of Allocation Factors (Sewer) Allocation Factors) Water Comumpson by CoMornef CWss Tygsw Cash B Amounfdrmuentgencatedby edCbr sfgnerClass BODEnuent TSSEiiluent Nubar of Accouns lewe(in lv%L)jlawls (in Mg&) by Cusromer CWss soDReklerl TSS-RRRed I Costsesaonwou tswv KM1YTP 1111 w1vTP eusremeraeanaeeretlro Me RLC495Mg P/OLassing yshim •HyM&rho C4aacMorW �B06RBIetetl �'P.MRS Re m xam Eples of Ceele • Emuerit Pumpng 31eaans = •Cu &, Bam • Cofecbon sysfwn Cosh 'E4uprnw a ant...n�. •Cusfoner Semce As a result of applying the allocation factors to the cost classifications (i e., the Volume, BOD, TSS, and Customer costs), the revenue required from each customer class is accumulated by customer class, as shown in Figure 10 Figure 10. Allocation of Revenue Requirements to Customer Classes (Sewer) TASK S. RATE DESIGN ANALYSIS Task Objectives: NBS will work with City staff to develop the best suited alternative rate structures for the water and sewer utilities by incorporating the City's broader rate design goals and objectives. Task Deliverables: Rates for the three rale structures for water and sewer, including the evaluation of the pros and cons of vanous rate structure alternatives. Develop Rate Design Recommendations — While we believe rate design is more applicable to water rates, we will also review the sewer rate design We will include a discussion of the relative ments (pros and cons) of the City's current rete structures and the new alternatives. This discussion and analysis may include issues such as the amount of revenue collected from fixed vs volumetric charges, the percentage rate increases between tiers, total quantities of water included in each tier, and amount of revenue collected in each tier Criteria for Improving the Rata Design — There are a number of criteria that NBS will discuss with City staff in considering new rate structures, including. • How costs allocated to fixed and volumetric rates affect revenue stability. • How summer peaking patterns are reflected in water rate design. • How meter sizes are used in calculating fixed charges. • The number of bers that should be implemented. Classification Components S 3,976,996 $ 1,176,6301 S 1,171,180 S 1, , U1 7,545,150 Net Revenue Requirements 15% 17% 100% 53% 16% Single -Family Residential $ 962,013 $ 246,676 $ 239,608 $ 544,013 S 1,992,310 Mufti -Family Residential $ 1,522,085 $ 390.290 $ 379,107 $ 587,925 S 2,879,417 Commercial - Business S 888,087 $ 227,720 $ 221,195 $ 102,996 S 1,410,000 Commercial - Restaurants S 225,7T $ 188,523 $ 202,890 $ 15,849 $ 632,839 Commercial - Hotels $ 258,430 $ 84,956 $ 71,316 $ 3,319 S 418,021 Institutional $ 113,140 $ 37,194 $ 16,011 $ 5,408 S 171,751 Schools $ 7'4 $ 1,273 S 1,053 S 1,043 S 10,813 Total S 3,878,986 '$ 1;176,832 S 1,131,180 5 1,260,363 S 7,546,161 TASK S. RATE DESIGN ANALYSIS Task Objectives: NBS will work with City staff to develop the best suited alternative rate structures for the water and sewer utilities by incorporating the City's broader rate design goals and objectives. Task Deliverables: Rates for the three rale structures for water and sewer, including the evaluation of the pros and cons of vanous rate structure alternatives. Develop Rate Design Recommendations — While we believe rate design is more applicable to water rates, we will also review the sewer rate design We will include a discussion of the relative ments (pros and cons) of the City's current rete structures and the new alternatives. This discussion and analysis may include issues such as the amount of revenue collected from fixed vs volumetric charges, the percentage rate increases between tiers, total quantities of water included in each tier, and amount of revenue collected in each tier Criteria for Improving the Rata Design — There are a number of criteria that NBS will discuss with City staff in considering new rate structures, including. • How costs allocated to fixed and volumetric rates affect revenue stability. • How summer peaking patterns are reflected in water rate design. • How meter sizes are used in calculating fixed charges. • The number of bers that should be implemented. • The amount of revenue that should be collected within each tier • How to address "price elasticity" reductions in water use in response to rate Increases. • Impacts on customer monthly bills. The rate structure alternative selected will, In the end, provide the basis for comparing monthly customer bills under both the current and new rate structure. However, all rate structures will be "revenue neutral" because they will all collect the same amount of revenue from each customer class. Evaluation of Consumption Patterns - NBS will perform a detailed analysis that will identify the number of customers at various levels of consumption and the total water use that ocoum within each tier The City's most recent water consumption data will be used for this analysis This type of data analysis ensures an accurate projection of the revenue that will be collected within each tier, and allows for testing various rate structure alternatives (e g , changing tier breakpoints and rates) in order to accurately design water rate tiers and recover sufficient revenues. Figure 11 illustrates the type of distribution curve that summarizes the number of customers by consumption level. Calculate Fixed and Volumetric Charges - Fixed costs consider the number of accounts, equivalent meters, and the number and size of meters. In contrast, variable costs are typically allocated in proportion to consumption We note that although a strict cost -of -service methodology would determine the percentages of rate revenue collected from fired and variable rates, other factors are typically considered in this process Other factors include revenue stability, water conservation goals, ease of understanding, and ease of administration. NES will recommend a rate structure that provides a balance between fixed and variable charges, with the goal of recovering all or a significant portion of fixed costs from fixed charges and variable costs from variable charges, while also encouraging water conservation. Figures 12, 13 and 14 Illustrate how the rate -design analysis recovers customer costs based on the total number of meters, capacity costs from each meter size based on the hydraulic capacity, and how commodity costs are recovered from customers based on water consumption Figure 12. Example of Fixed Charges Calculations Figure 13. Example of Commodity Rate Calculations Single -Family Residential 23,257 6.396,362 $ 6,251,321 1 $0.977 1 Tiered Muft-Famlly Residential 1,039 502,068 $ 490,683 $0.977 Undbr, Commelrial 3,364 3,057,570 $ 2,968,236 $0.877 1 Umlorm — 1 Assumes all customerclesses wit consume 5% less wirer than m FY 2012113 dee to conservation efforts Figure 14. Example of Single -Family Residential, Three -Tier Rate Calculations Comparison of Monthly Water Bills — We will prepare an analysis of monthly water bills for various types of customers, such as single-family customers with low-, average-, and high-water usage under each rale alternative evaluated In the study This analysis is useful when evaluating the effects of different rate structures on customers, as Illustrated In Figure 15 Figure 15. Example of Monthly Bill Comparison Five -Year Rate Schedule — We will provide the City with a rate schedule that includes proposed rates for the next five years and a projection of the typical hill for the five year period, as illustrated in Figure 16. Figure 16. Example of Monthly Bill Projection TASK 6. PREPARE A WRITTEN STUDY REPORT Task Objectives: Prepare draft and final reports Task Deliverables: Draft and Final Reports for review by City Staff that include our final recommendations for the financial plans, reserve policies and rate structures. Sufficient Information will be provided in the report for staff, the Council and the public to review and understand the study. NBS will prepare draft and final rate study reports that include proposed rates for the next five years, although the financial models will cover a 20 -year period An executive summary and Introduction %ill present the purpose of the report and results of the study. The report wilt summarize the findings and recommendations, including proposed rates, and present appropriate customer bill comparisons using fables, graphs, and charts as needed. The emphasis will be on providing a clear, concise, and understandable report Preliminary study results will be forwarded to City staff well ahead of the draft report, and then to the City Council once City staff is comfortable with the results We typically will review initial results (e g., revenue requirements, financial plans, cost -of -service analysis, and rate design results) with staff at the time they are developed. This helps ensure that City staff are 'on -board' with the results before moving ahead with presenting any materials to the City Council or public. The City's comments' will be incorporated Into the final report. TASK 7. MEETINGS AND PRESENTATIONS 7.1 Meetings With City S/eff Task Objectives: Facilitate study progress, communication of results, and meet with City staff Task Dellvembles: Provide up to two (2) on-site meetings with Staff to review work products and study progress. NBS proposes to have two on-site progress meetings with City staff to review initial work products and gain input from Staff an the direction of the study, in addition to the kickoff meeting in Task 1, We also expect to have regular phone conversations with City staff to discuss how the study is proceeding, get input from Staff, and prior to the public meetings to review and discuss the study's initial results and work products 7.2 City Council Presentations and Public Workshops Task Objectives: Effectively communicate with the City Council and the public as needed to successfully complete the study. Task Deliverables: Provide on-site presentations with the City Council and public as requested NBS will plan to meet with the City Council and the public to successfully adopt and implement the recommended rate study results Additional meetings/presentations can be provided as needed We propose the following meetingstpresentations for Nis task, however if selected for this study, we would like to refine our approach, in order to best meet the City's needs City Council Presentations — NBS proposes four (4) City Council presentations: (1) to present an overview of the study objectives, best practices for utility fund management, and solicit input on rate -related policies and rate design, (2) to review and discuss preliminary rate study results, recommendations, proposed rates, and receive general input and answer questions from the Council, (3) to review and discuss final rate study results and the study report which will include proposed rates and seek approval to begin the Prop 218 process, and, (4) attend and present at a Prop 218 -related public hearing. Public Outreach Workshops — NBS proposes two (2) public outreach workshops: the first will take place after the second City Council presentation to present preliminary findings made in the rate study, answer ' We assume Citystaff comments will be in an electmnic Microsoft Word file using track -changes made to incorporate all City comments questions from and solicit input from the public on the development of new water and sewer rates. The second workshop will take place after the Prop 218 notices for any proposed rate adjustment is mailed, to review the results of the rate study vnth attendees and explain the need for any proposed rate increase These activities will better prepare City staff and the Council by helping them more dearly understand the public's reacuon to possible rate increases and what they should expect at the public hearing If the City would like a more extensive public engagement process than what is described here, such as implementing a Citizen's Advisory Group, we have the expertise in handling these types of programs and can assist the City in designing executing that plan and meeting with the public We will also prepare all presentation material required for the adoption of new water and sewer rates, including a PowerPoint presentation and any additional worksheets or handouts 7.3 Infamabonal Mallers Task Objectives: Distribute Information about the rate study and any proposed adjustments to water and/or sewer rates. Task Deliverables: Create two (2) informational mailers that will be mailed to the public In order to distribute information about the rete study and any proposed rate adjustment. NBS Staff will provide the whole range of services for such Increases, Including: Design of the announcement (such as a customized postcard within City branding standards) as well as mailing coordination with a third party mailing house. An example of a postcard we designed and mailed announcing an adjustment in sewer rates for a similar project is included in Appendix. We will work with City staff to finalize the content and format of these two mailers. MANAGING TIMELINES AND PROJECT COSTS We understand that budgets and timelines ate critical to the success of this study, and our commitment to the City is that our proposed tasks will not cost more than budgeted or take longer than originally planned (to the extent that NBS has control over the schedule). If additional funds are needed due to tasks not included in the proposal, we will discuss this with the City and propose options for revising the budget and/or the scope of work No additional work will be undertaken prior to approval by the City's project manager NBS has standard consulting -industry accounting systems and practices that track consulting hours by task, by team member, and by client. We provide monthly detailed reports and invoicing, but will discuss any particular needs the City may have with regard to invoicing and tracking of costs. Our projects are performed on a time -and -materials basis with not -to -exceed limits, thus guaranteeing that we will not exceed the proposed costs. EXHIBIT B — COST PROPOSAL Our detailed project budget is shown below We express this honestly and transparently through our price proposal. Additional services requested,, such as additional community meetings or additional rale alternatives, can be provided based on the hourly labor rates shown in the budget table below All tasks would be mutually agreed upon by NBS and the City prior to proceeding RCVISED PROJECT BUDGET -CA, bi 81l,0 wile I& Wellue,meWIRM. Tel Study Mal Cam TasF 1-KkiMMce0ng5 Cl Collection 20 Bo 1601 1 260 %230 Task 2- Paul off CuasM antes d Pdr 40 80 120 82.180 Teak 3-Fllenual Plan est Re�erue Raqulromanls 31- ProPaa Fllmnmal Fill 6D 160 240 450 %910 l Task 4 -Cast tvxxt ArKdysis(COSH) 41-COSA Wel. tlelny 40 160 Mol 1 420 %210 42 -COSH S. Uddy 40 160 220 420 %210 Task 5 -Hate Devon Anall 51- Deekp Rate,eslgn RKgmmMdrtlwM 60 80 40 -I 180 10,130 52-Ea3luelP, tf ConsumppOn sell 20 80 240 340 $4,730 53- Cakulde, F,ved a Volumnnc ClubW 40 100 160 300 54.500 54- Mcddy Bill Comyansae 10 40 Bo 110 1 81.615 TYk 6- Prepare A Wngen Study Report 80 1801 80 -I 320 95,360 Task T - Meaings ant Plesbaskprts 1 T1- Meetings Poor Qty Stall Bil 40 1201 40 - 200 53.325 22 -Pubs, Pmsentebcidu Meeinge(61a) 23- libnMioltal Ml 60 Pit -W 480 PS Maem - 540 (ss'setleJl sii,o30 $10,000 20,11!121113 mo. 9M ow EM fi' iF RelMGssade Expenses' I Cast In labor 1b, deapning and reelerg malars Is $5,"pa mile, plus dl.t asbaMe. dnttessaty (e g. Perdl mating Putdil ) Pnmay staff MX be, Irn Reyes, Semw Weill CmGrMtm IMOAcur lana rate) 2 Esbmeled Hare! lest Peril aperees W Soul to attend el (8) ,-site meehrgYpreserNMm�s Attachment "C PROFESSIONAL SERVICES AGREEMENT for Water and Sewer Rate Study Between City of Seal Beach 211 8th Street Seal Beach, CA 90740 H NBS Government Finance Group dba NBS 32605 Temecula Parkway Temecula, CA 92562 This Professional Service Agreement ("the Agreement') is made as of November 13, 2017 (the "Effective Date"), by and between NBS Government Finance Group dba NBS ("Consultant'), a California Corporation, and the City of Seal Beach ("City"), a California charter city, (collectively, "the Parties"). 57296-0001 \2142827v2.dm RECITALS A. City desires certain professional services. B. Consultant represents that it is qualified and able to provide City with such services. NOW THEREFORE, in consideration of the Parties' performance of the promises, covenants, and conditions stated herein, the Parties hereto agree as follows. AGREEMENT 1.0 Scope of Services 1.1. Consultant shall provide those services ("Services") set forth in the attached Exhibit A, which is hereby incorporated by this reference. To the extent that there is any conflict between Exhibit A and this Agreement, this Agreement shall control. 1.2. Consultant shall perform all Services under this Agreement in accordance with the standard of care generally exercised by like professionals under similar circumstances and in a manner reasonably satisfactory to City. 1.3. In performing this Agreement, Consultant shall comply with all applicable provisions of federal, state, and local law. 1.4. Consultant will not be compensated for any work performed not specified in the Scope of Services unless the City authorizes such work in advance and in writing. The City Manager may authorize extra work to fund unforeseen conditions up to the amount approved at the time of award by the City Council. Payment for additional work in excess of this amount requires prior City Council authorization. 2.0 Term This term of this Agreement shall commence as of the Effective Date and shall continue for a term of two (2) years unless previously terminated as provided by this Agreement. 3.0 Consultant's Compensation City will pay Consultant in accordance with the hourly rates shown on the fee schedule set forth in Exhibit A, page 4 for Services but in no event will the City pay more than $42,440. Any additional work authorized by the City pursuant to 2of9 srtes-000i \2i 42e27v2.&C Section 1.4 will be compensated in accordance with the fee schedule set forth in Exhibit A, page 4. 4.0 Method of Payment 4.1. Consultant shall submit to City monthly invoices for all services rendered pursuant to this Agreement. Such invoices shall be submitted within 15 days of the end of the month during which the services were rendered and shall describe in detail the services rendered during the period, the days worked, number of hours worked, the hourly rates charged, and the services performed for each day in the period. City will pay Consultant within 30 days of receiving Consultant's invoice. City will not withhold any applicable federal or state payroll and other required taxes, or other authorized deductions from payments made to Consultant. 4.2. Upon 24-hour notice from City, Consultant shall allow City or City's agents or representatives to inspect at Consultant's offices during reasonable business hours all records, invoices, time cards, cost control sheets and other records maintained by Consultant in connection with this Agreement. City's rights under this Section 4.2 shall survive for two years following the termination of this Agreement. 5.0 Termination 5.1. This Agreement may be terminated by City, without cause, or by Consultant based on reasonable cause, upon giving the other party written notice thereof not less than 30 days prior to the date of termination. 5.2. This Agreement maybe terminated by City upon 10 days' notice to Consultant if Consultant fails to provide satisfactory evidence of renewal or replacement of comprehensive general liability insurance as required by this Agreement at least 20 days before the expiration date of the previous policy. 6.0 Party Representatives 6.1. The City Manager is the City's representative for purposes of this Agreement. 6.2. Greg Crumpler is the Consultant's primary representative for purposes of this Agreement. 7.0 Notices 7.1. All notices permitted or required under this Agreement shall be deemed made when personally delivered or when mailed 48 hours after deposit 3of9 57296-0001 \2142827 2.dOC in the United States Mail, first class postage prepaid and addressed to the party at the following addresses: To City: City of Seal Beach 211 -8th Street Seal Beach, California 90740 Attn: City Manager To Consultant: NBS 32605 Temecula Parkway, Suite 100 Temecula, CA 92592 Attn: Greg Crumpler 7.2. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. 8.0 Independent Contractor 8.1. Consultant is an independent contractor and not an employee of the City. All services provided pursuant to this Agreement shall be performed by Consultant or under its supervision. Consultant will determine the means, methods, and details of performing the services. Any additional personnel performing services under this Agreement on behalf of Consultant shall also not be employees of City and shall at all times be under Consultant's exclusive direction and control. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance. 8.2. Consultant shall indemnify and hold harmless City and its elected officials, officers, employees, servants, designated volunteers, and agents serving as independent contractors in the role of City officials, from any and all liability, damages, claims, costs and expenses of any nature to the extent arising from Consultant's personnel practices. City shall have the right to offset against the amount of any fees due to Consultant under this Agreement any amount due to City from Consultant as a result of Consultant's failure to promptly pay to City any reimbursement or indemnification arising under this Section. 9.0 Subcontractors No portion of this Agreement shall be subcontracted without the prior written approval of the City. Consultant is fully responsible to City for the performance of any and all subcontractors. 4 of 9 87296-0001 \2 1 4ze2M.do 10.0 Assignment Consultant shall not assign or transfer any interest in this Agreement whether by assignment or novation, without the prior written consent of City. Any purported assignment without such consent shall be void and without effect. 11.0 Insurance 11.1. Consultant shall not commence work under this Agreement until it has provided evidence satisfactory to the City that Consultant has secured all insurance required under this Section. Consultant shall furnish City with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the City. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the City if requested. All certificates and endorsements shall be received and approved by the City before work commences. The City reserves the right to require complete, certified copies of all required insurance policies, at any time. 11.2. Consultant shall, at its expense, procure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of this Agreement. Insurance is to be placed with insurers with a current A.M. Best's rating no less than A:VIII, licensed to do business in California, and satisfactory to the City. Coverage shall be at least as broad as the latest version of the following: (1)General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (2) Automobile Liability: Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto); and, if required by the City, (3) Professional Liability. Consultant shall maintain limits no less than: (1)General Liability: $2,000,000 per occurrence for bodily injury, personal injury and property damage and if Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreementtlocation or the general aggregate limit shall be twice the required occurrence limit; (2) Automobile Liability: $1,000,000 per accident for bodily injury and property damage; and (3) Professional Liability: $1,000,000 per claim/aggregate. 11.3. The insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms supplied or approved by the City to state: (1) coverage shall not be suspended, voided, reduced or canceled except after 30 days prior written notice by certified mail, return receipt requested, has been given to the City; (2) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect 5 of 9 57288-0001W142527 Um coverage provided to the City, its directors, officials, officers, (3) coverage shall be primary insurance as respects the City, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the Consultant's scheduled underlying coverage and that any insurance or self-insurance maintained by the City, its directors, officials, officers, employees, agents and volunteers shall be excess of the Consultant's insurance and shall not be called upon to contribute with it; (4) for general liability insurance, that the City, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the services or operations performed by or on behalf of the Consultant, including materials, parts or equipment furnished in connection with such work; and (5) for automobile liability, that the City, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Consultant or for which the Consultant is responsible. 11.4. All insurance required by this Section shall contain standard separation of insureds provisions and shall not contain any special limitations on the scope of protection afforded to the City, its directors, officials, officers, employees, agents, and volunteers. 11.5. Any deductibles or self-insured retentions shall be declared to and approved by the City. Consultant guarantees that, at the option of the City, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its directors, officials, officers, employees, agents, and volunteers; or (2) the Consultant shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses. 12.0 Indemnification, Hold Harmless, and Duty to Defend Consultant shall defend, indemnify, and hold the City, its officials, officers, employees, volunteers and agents serving as independent contractors in the role of city officials (collectively "Indemnitees") free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any acts or omissions of Consultant, its employees, or its agents in connection with the performance of this Agreement, including without limitation the payment of all consequential damages and attorneys' fees and other related costs and expenses, except for such loss or damage arising from the sole negligence or willful misconduct of the City. With respect to any and all such aforesaid suits, actions, or other legal proceedings of every kind that may be brought or instituted against Indemnitees, Consultant shall defend Indemnitees, at Consultant's own cost, expense, and risk, and shall pay and satisfy any judgment, award, or decree that may be rendered against Indemnitees. Consultant shall reimburse City and its directors, officials, officers, 6 of 9 57296-00M2142827Y2.dx employees, agents and/or volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. Consultant's obligation to indemnity shall not be restricted to insurance proceeds, if any, received by Consultant, the City, its directors, officials, officers, employees, agents or volunteers. All duties of Consultant under this Section shall survive termination of this Agreement. 13.0 Equal Opportunity Consultant affirmatively represents that it is an equal opportunity employer. Consultant shall not discriminate against any subcontractor, employee, or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex, sexual orientation, or age. Such non-discrimination includes, but is not limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff, or termination. 14.0 Labor Certification By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code that require every employer to be insured against liability for Workers' Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services. 15.0 Entire Agreement This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings, or agreements. This Agreement may only be modified by a writing signed by both parties. 16.0 Severability The invalidity in whole or in part of any provisions of this Agreement shall not void or affect the validity of the other provisions of this Agreement. 17.0 Governing Law This Agreement shall be governed by and construed in accordance with the laws of the State of California. 16.0 No Third Party Rights No third party shall be deemed to have any rights hereunder against either party as a result of this Agreement. 7of9 S7296-0001�214282M.dm 19.0 Waiver No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a party shall give the other party any contractual rights by custom, estoppel, or otherwise. 20.0 Prohibited Interests; Conflict of Interest 20.1. Consultant covenants that it presently has no interest and shall not acquire any interest, direct or indirect, which may be affected by the Services, or which would conflict in any manner with the performance of the Services. Consultant further covenants that, in performance of this Agreement, no person having any such interest shall be employed by it. Furthermore, Consultant shall avoid the appearance of having any interest, which would conflict in any manner with the performance of the Services. Consultant shall not accept any employment or representation during the term of this Agreement which is or may likely make Consultant 'financially interested" (as provided in California Government Code §§1090 and 87100) in any decision made by City on any matter in connection with which Consultant has been retained. 20.2. Consultant further warrants and maintains that it has not employed or retained any person or entity, other than a bona fide employee working exclusively for Consultant, to solicit or obtain this Agreement. Nor has Consultant paid or agreed to pay any person or entity, other than a bona fide employee working exclusively for Consultant, any fee, commission, gift, percentage, or any other consideration contingent upon the execution of this Agreement. Upon any breach or violation of this warranty, City shall have the right, at its sole and absolute discretion, to terminate this Agreement without further liability, or to deduct from any sums payable to Consultant hereunder the full amount or value of any such fee, commission, percentage or gift. 20.3. Consultant warrants and maintains that it has no knowledge that any officer or employee of City has any interest, whether contractual, non - contractual, financial, proprietary, or otherwise, in this transaction or in the business of Consultant, and that if any such interest comes to the knowledge of Consultant at any time during the term of this Agreement, Consultant shall immediately make a complete, written disclosure of such interest to City, even '11 such interest would not be deemed a prohibited "conflict of interest' under applicable laws as described in this subsection. 21.0 Attorneys' Fees If either party commences an action against the other party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, 8of9 S7296-0001 \2142827v2.doc the prevailing party in such litigation shall be entitled to have and recover from the losing parry all of its attorneys' fees and other costs incurred in connection therewith. 22.0 Exhibits All exhibits referenced in this Agreement are hereby incorporated into the Agreement as if set forth in full herein. In the event of any material discrepancy between the terms of any exhibit so incorporated and the terms of this Agreement, the terms of this Agreement shall control. 23.0 Corporate Authority The person executing this Agreement on behalf of Consultant warrants that he or she is duly authorized to execute this Agreement on behalf of said Party and that by his or her execution, the Consultant is formally bound to the provisions of this Agreement. IN WITNESS WHEREOF, the Parties hereto, through their respective authorized representatives have executed this Agreement as of the date and year first above written. CITY OF SEAL BEACH CONSULTANT: NBS GOVERNMENT FINANCE GROUP dba NBS M Attest: Jill R. Ingram, City Manager By: Its: By: Robin Roberts, City Clerk By: Approved as to Form: Its: Craig A. Steele, City Attorney 9of9 67296-000112142827V240C Attachment "D" `)NBS 32605 Tamacola Parkway. Suite 100 Temecula, CA 92592 Toll tree'. 800.676 7516 (P) 951.296.1997 nfiaeov.com October 26, 2017 Mr. Michael Ho, P.E. Deputy Director of Public Works/City Engineer City of Seal Beach Public Works Department 211 Eighth Street Seal Beach, CA 90740 RE: CONTRACT AMENDMENT TO THE WATER AND SEWER RATE STUDY AGREEMENT Dear Mr. Ho We appreciate the opportunity to provide additional services related to the City of Seal Beach's ("City') Water and Sewer Rate Study. This letter agreement outlines the additional scope of work based on our discussions with you, for updating the water and sewer rate analysis with updated financial information and customer data, with the intent of finishing the study. Additionally, our original Professional Services Agreement with the City of Seal Beach has since expired, and there is a need to extend the tens and increase the budget to complete the scope of work. This agreement provides the budget and contract mechanism necessary to approve these additional consulting services. These additional services will be provided as an amendment to our original agreement with the City. All other provisions of the original contract between the City and NBS will remain in effect. Please print and sign two (2) copies of this Letter Agreement and return to us (please mart to: NBS, 32605 Temecula Parkway, Suite 100, Temecula, CA 92592, Attn: Amanda MifchellJ. We look forward to continuing our professional relationship with you and the City. Please do not hesitate to contact Kim Boehler our Project Manager, at either 951233.7050 (cell), 800.676.7516 (office) or at kboehler@nbsgov.cem, if you have any questions or concerns about this additional scope of work. Our scope of work for the additional tasks, project budget and terns are provided on the following pages. Additional Scope of Work The City has requested that NBS update the base financial information and customer data used in the analysis, and provide additional financial plan and rate alternatives beyond those anticipated for this study. In order to complete the study, these additional services will require additional budget The scope of services outlined in our original proposal (dated November February 3, 2015) and the Contract Amendment (dated September 8, 2017) will remain unchanged. helping communities fund tomorrow The table below summarizes our budget for this proposed scope of work. Hours assigned to each task represent the additional work required to update the analysis with new financial Information and customer statistics, and complete the Water and Sewer Rate Study, We will bill the City monthly for services completed. Any additional services authorized but not included in this study budget will be billed at the rates shown in the table below. PROJECT BUIDGET City of Sm.' B.,.h W�tar & S.�mr Rate St.d, Trk 1 -Dela ddrdkm .... Consultant .. .. <, C.01.0 LaborrHoort, r•. Amendment - Od.ba, ... �r • 4.0 2017 -d3&0 G ntd Twy� sego Teak 2-Retew d qulyt Relse 4 P01kka so Teak 3-Feundd Ren Ind Rewr.w RsOsimrnenh 3.1 - Pmpra FlnrrJel PWe 8.0 &0 N a $5,850 Task 4-Cose-oMemice Arai ((DSA) /.1-COSA:WetarURlty2.0 4.0 40 120 54.020 4.2- CASA: Sewer UpItY 20 CO &0 120 $4.020 TM 5 -Rete Deske Maiyom 5.1- Develop Rale Dea W Recammandalklw 20 4.0 8.0 12.0 62,310 6.2-Eteluetbn dCarounptlon Pahhaa 20 4.0 8.0 14.0 62210 5.3-Cakulele Fixed & Vdumehk Chases 20 4.0 8.0 10.0 62,210 5.4-MmBYY BeCOlrpaMorc - 20 4.0 S. 12.0 61.930 Tack B-Prgaae WdhanSWyResod 20 8.0 12.0 22.0 61,150 TmM ]-Meelinp 9114 Preaenlalloa ].1- Meeage yeah City SM Mae) 40 6.0 12.0 62,250 ].2- Pubic Pmsedellandieeansa (1re)' 40.0 5.0 150 $9,050 ].3-bbnneOwlMesw (OpI)onW TaskJx-Based Reimbumeda Expemas pn NBS'pmcf Cdala $;800 $B00 onginei scope mewe mandedWxpuba, meegrps. One meeting ties been pmeidad, flue man are anaalpaw 2. rhe w glaal ampe oRmM laduded Mo bbrma9onel amen,. Based an de mn an WM City Stift one iabmntlanal anam, , Me be m&denl lorbis p Hd Eye ads tisk, NBS al um a submn.dbna CVs troths b produce in. lnbmmme,mma, Ti wd bale City Mil be based on NBS' dlndat`4 per CV Ste age a Pnpoael (esflmahrd me exceed conte mw.w hen and does notladWe any edition.,coals br.bcN Phebirephy). Pleate nab: Inm made' 'aaortia a,1MJW PeaRamane 21a Nabi ngeine en. dash newnbe and doe. nolindnde pdnbng end mine, ,.amm, 3. EsEmebd earopnbled expeame b'Me ynjedme tegerb attend on-vM meetrrgvymmnMbons. Z) N BS Page 2 Additional Services The following table shows the hourly rates that will apply to this amendment and any additional services authorized but not included in the scope of services. Terms The same terms under the original contract will apply to these additional services: consulting fees will be Invoiced on a monthly basis. Expenses will be included in each invoice. If the project is prematurely terminated by either party or delayed for reasons beyond NBS' control, NBS shall receive payment for work completed. Payment shall be made within 30 days of submittal of an invoice. If payment is not received within 90 -days simple interest will begin to accrue at the rate of 1.5% per month, City's Responsibilities The City shall furnish Consultant with any pertlnera Information that is available to the City and applicable to the Services. The City shall designate a person to act with authority on its behalf in respect to the Services. The City shall promptly respond to Consultant's requests for reviews and approvals of its work, and to its requests for decisions related to the Services. The City understands and agrees that Consultant is entitled to rely on all information, data and documents (collectively, "Information') supplied to Consultant by the City or any of its agents, contractors or proxies or obtained by Consultant from other usual and customary sources including other government sources or proxies as being accurate and correct and Consultant will have no obligation to confine that such Information is correct and that Consultant will have no liability to City or any third party if such information is not correct. Signature NBS Government Finance Group, City of Seal Beach DBA NBS Michael antner Name President and CEO ! 42(P 117 Title 4D N BS Page 3