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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
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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
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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.
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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,
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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
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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.
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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
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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
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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.
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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.
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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,
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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
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• 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