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HomeMy WebLinkAboutresolution.council.028-12 RESOLUTION # ag (Series of 2012) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, APPROVING A CONTRACT BETWEEN THE CITY OF ASPEN AND ARCADIS-US INC. FOR PROFESSIONAL SERVICES TO ANALYZE AND DEVELOP A WATER UTILITY BUSINESS PLAN AUTHORIZING THE CITY MANAGER TO EXECUTE SAID CONTRACT ON BEHALF OF THE CITY OF ASPEN, COLORADO. WHEREAS, there has been submitted to the City Council a contract for professional services to analyze and develop a water utility business plan, between the City of Aspen and Arcadis-US Inc., a true and accurate copy of which is attached hereto as Exhibit "A"; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, That the City Council of the City of Aspen hereby approves that Contract for professional services to analyze and develop a water utility business plan, between the City of Aspen and Arcadis-US Inc., a copy of which is annexed hereto and incorporated herein, and does hereby authorize the City Manager to execute said agreement on behalf of the City of Aspen. INTRODUCED, READ AND ADOPTED O by the City Council of the City of Aspen on the 9th day of April 2012. -07 Michael C. Ireland, Mayor I, Kathryn S. Koch, duly appointed and acting City Clerk do certify that the foregoing is a true and accurate copy of that resolution adopted by the City Council of the City of Aspen, Colorado, at a meeting held, April 9, 2012. ' Kathryn S. Koch, City C erk the City of Aspen CITY OF ASPEN STANDARD FORM OF AGREEMENT CityHmornerstlike PROFESSIONAL SERVICES City of Aspen Project No.: 2012-006. AGREEMENT made as of 26`1'day of March,in the year 2012. BETWEEN the City: Contract Amount: The City of Aspen c/o Water Department 130 South Galena Street Total: $88,390.00 Aspen,Colorado 81611 Phone: (970)920-5055 If this Agreement requires the City to pay And the Professional: an amount of money in excess of $25,000.00 it shall not be deemed valid Red Oak C'onsultiii�~• R(r p IS— s Inc until it has been approved by the City Council of the City of Aspen. e/o John Gallagher 100 Fillmore Street City Council Approval: Suite 200 Denver, CO 80206 Date: Phone: 303-316-6500 Resolution No.: For the Following Project: Professional services to analyze and develop a Water Utility business plan to include the following rate and fee analysis and ordinances: raw water rates, utility connection charges, utility hookup charges, snowmaking rates, metered and unmetered water rates,pumping charges,and water service deposits. Exhibits appended and made a part of this Agreement: Exhibit A: Scope of Work Exhibit B: Hourly Fee Schedule Agreement Professional Services Page 0 The City and Professional agree as set forth below. I. Scope of Work. Professional shall perform in a competent and professional manner the Scope of Work as set forth at Exhibit A attached hereto and by this reference incorporated herein. 2. Completion. Professional shall commence Work immediately upon receipt of a written Notice to Proceed from the City and complete all phases of the Scope of Work as expeditiously as is consistent with professional skill and care and the orderly progress of the Work in a timely manner. The parties anticipate that all Work pursuant to this Agreement shall be completed no later than November 30, 2012. Upon request of the City, Professional shall submit, for the City's approval, a schedule for the performance of Professional's services which shall be adjusted as required as the project proceeds, and which shall include allowances for periods of time required by the City's project engineer for review and approval of submissions and for approvals of authorities having jurisdiction over the project. This schedule, when approved by the City, shall not, except for reasonable cause,be exceeded by the Professional. 3. Payment. In consideration of the work performed, City shall pay Professional on a time and expense basis for all work performed. The hourly rates for work performed by Professional shall not exceed those hourly rates set forth at Exhibit B appended hereto. Except as otherwise mutually agreed to by the parties the payments made to Professional shall not initially exceed the amount set forth above. Professional shall submit, in timely fashion, invoices for work performed. The City shall review such invoices and, if they are considered incorrect or untimely,the City shall review the matter with Professional within ten days from receipt of the Professional's bill. 4. Non-Assignability. Both parties recognize that this Agreement is one for personal services and cannot be transferred, assigned, or sublet by either party without prior written consent of the other. Sub-Contracting, if authorized, shall not relieve the Professional of any of the responsibilities or obligations under this Agreement. Professional shall be and remain solely responsible to the City for the acts, errors, omissions or neglect of any subcontractors' officers, agents and employees, each of whom shall, for this purpose be deemed to be an agent or employee of the Professional to the extent of the subcontract. The City shall not be obligated to pay or be liable for payment of any sums due which may be due to any sub-contractor. 5. Termination of Procurement. The sale contemplated by this Agreement may be canceled by the City prior to acceptance by the City whenever for any reason and in its sole discretion the City shall determine that such cancellation is in its best interests and convenience. 6. Termination of Professional Services. The Professional or the City may terminate the Professional Services component of this Agreement, without specifying the reason therefor, by giving notice, in writing, addressed to the other party, specifying the effective date of the termination. No fees shall be earned after the effective date of the termination. Upon any termination, all finished or unfinished documents, data, studies, surveys, drawings, maps, models, photographs, reports or other material prepared by the Professional pursuant to this Agreement shall become the property of the City. Notwithstanding the above, Professional shall not be relieved of Agreement Professional Services Page 1 any liability to the City for damages sustained by the City by virtue of any breach of this Agreement by the Professional,and the City may withhold any payments to the Professional for the purposes of set-off until such time as the exact amount of damages due the City from the Professional may be determined. 7. Independent Contractor Status. It is expressly acknowledged and understood by the parties that nothing contained in this agreement shall result in, or be construed as establishing an employment relationship. Professional shall be, and shall perform as, an independent Contractor who agrees to use his or her best efforts to provide the said services on behalf of the City. No agent, employee, or servant of Professional shall be, or shall be deemed to be, the employee, agent or servant of the City. City is interested only in the results obtained under this contract. The manner and means of conducting the work are under the sole control of Professional. None of the benefits provided by City to its employees including,but not limited to,workers'compensation insurance and unemployment insurance, are available from City to the employees, agents or servants of Professional. Professional shall be solely and entirely responsible for its acts and for the acts of Professional's agents, employees, servants and subcontractors during the performance of this contract. Professional shall indemnify City against all liability and loss in connection with, and shall assume full responsibility for payment of all federal, state and local taxes or contributions imposed or required under unemployment insurance, social security and income tax law, with respect to Professional and/or Professional's employees engaged in the performance of the services agreed to herein. 8. Indemnification. Professional agrees to indemnify and hold harmless the City, its officers, employees, insurers, and self-insurance pool, from and against all liability, claims, and demands, on account of injury, loss, or damage, including without limitation claims arising from bodily injury, personal injury, sickness, disease, death, property loss or damage, or any other loss of any kind whatsoever, which arise out of or are in any manner connected with this contract, if such injury, loss, or damage is caused in whole or in part by, or is claimed to be caused in whole or in part by,the act, omission, error, professional error, mistake, negligence, or other fault of the Professional, any subcontractor of the Professional, or any officer, employee, representative, or agent of the Professional or of any subcontractor of the Professional, or which arises out of any workmen's compensation claim of any employee of the Professional or of any employee of any subcontractor of the Professional. The Professional agrees to investigate, handle, respond to, and to provide defense for and defend against, any such liability, claims or demands at the sole expense of the Professional, or at the option of the City, agrees to pay the City or reimburse the City for the defense costs incurred by the City in connection with, any such liability, claims,or demands. If it is determined by the final judgment of a court of competent jurisdiction that such injury, loss, or damage was caused in whole or in part by the act, omission, or other fault of the City, its officers, or its employees, the City shall reimburse the Professional for the portion of the judgment attributable to such act, omission,or other fault of the City, its officers,or employees. 9. Professional's Insurance. (a) Professional agrees to procure and maintain, at its own expense, a policy or policies of insurance sufficient to insure against all liability, claims, demands, and other obligations assumed by the Professional pursuant to Section 8 above. Such insurance shall be in addition Agreement Professional Services Page 2 to any other insurance requirements imposed by this contract or by law. The Professional shall not be relieved of any liability, claims, demands, or other obligations assumed pursuant to Section 8 above by reason of its failure to procure or maintain insurance, or by reason of its failure to procure or maintain insurance in sufficient amounts,duration,or types. (b) Professional shall procure and maintain, and shall cause any subcontractor of the Professional to procure and maintain, the minimum insurance coverages listed below. Such coverages shall be procured and maintained with forms and insurance acceptable to the City. All coverages shall be continuously maintained to cover all liability, claims, demands, and other obligations assumed by the Professional pursuant to Section 8 above. In the case of any claims-made policy, the necessary retroactive dates and extended reporting periods shall be procured to maintain such continuous coverage. (i) Workers' Compensation insurance to cover obligations imposed by applicable laws for any employee engaged in the performance of work under this contract, and Employers' Liability insurance with minimum limits of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) for each accident, FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) disease - policy limit, and FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) disease - each employee. Evidence of qualified self-insured status may be substituted for the Workers'Compensation requirements of this paragraph. (ii) Commercial General Liability insurance with minimum combined single limits of ONE MILLION DOLLARS ($1,000,000.00) each occurrence and ONE MILLION DOLLARS ($1,000,000.00) aggregate. The policy shall be applicable to all premises and operations. The policy shall include coverage for bodily injury, broad form property damage (including completed operations), personal injury (including coverage for contractual and employee acts), blanket contractual, independent contractors, products, and completed operations. The policy shall contain a severability of interests provision. (iii) Comprehensive Automobile Liability insurance with minimum combined single limits for bodily injury and property damage of not less than ONE MILLION DOLLARS ($1,000,000.00) each occurrence and ONE MILLION DOLLARS ($1,000,000.00) aggregate with respect to each Professional's owned, hired and non- owned vehicles assigned to or used in performance of the Scope of Work. The policy shall contain a severability of interests provision. If the Professional has no owned automobiles, the requirements of this Section shall be met by each employee of the Professional providing services to the City under this contract. (iv) Professional Liability insurance with the minimum limits of ONE MILLION DOLLARS ($1,000,000) each claim and ONE MILLION DOLLARS ($1,000,000) aggregate. (c) The policy or policies required above shall be endorsed to include the City and the City's officers and employees as additional insureds. Every policy required above shall be primary Agreement Professional Services Page 3 insurance, and any insurance carried by the City, its officers or employees, or carried by or provided through any insurance pool of the City, shall be excess and not contributory insurance to that provided by Professional. No additional insured endorsement to the policy required above shall contain any exclusion for bodily injury or property damage arising from completed operations. The Professional shall be solely responsible for any deductible losses under any policy required above. (d) The certificate of insurance provided by the City shall be completed by the Professional's insurance agent as evidence that policies providing the required coverages, conditions, and minimum limits are in full force and effect, and shall be reviewed and approved by the City prior to commencement of the contract. No other form of certificate shall be used. The certificate shall identify this contract and shall provide that the coverages afforded under the policies shall not be canceled, terminated or materially changed until at least thirty (30)days prior written notice has been given to the City. (e) Failure on the part of the Professional to procure or maintain policies providing the required coverages, conditions, and minimum limits shall constitute a material breach of contract upon which City may immediately terminate this contract, or at its discretion City may procure or renew any such policy or any extended reporting period thereto and may pay any and all premiums in connection therewith, and all monies so paid by City shall be repaid by Professional to City upon demand, or City may offset the cost of the premiums against monies due to Professional from City. (f) City reserves the right to request and receive a certified copy of any policy and any endorsement thereto. (g) The parties hereto understand and agree that City is relying on, and does not waive or intend to waive by any provision of this contract, the monetary limitations (presently $150,000.00 per person and $600,000 per occurrence) or any other rights, immunities, and protections provided by the Colorado Governmental Immunity Act, Section 24-10-101 et seq., C.R.S., as from time to time amended, or otherwise available to City, its officers, or its employees. 10. City's Insurance. The parties hereto understand that the City is a member of the Colorado Intergovernmental Risk Sharing Agency (CIRSA) and as such participates in the CIRSA Proper- ty/Casualty Pool. Copies of the CIRSA policies and manual are kept at the City of Aspen Risk Management Department and are available to Professional for inspection during normal business hours. City makes no representations whatsoever with respect to specific coverages offered by CIRSA. City shall provide Professional reasonable notice of any changes in its membership or participation in CIRSA. 1 t. Completeness of Agreement. It is expressly agreed that this agreement contains the entire undertaking of the parties relevant to the subject matter thereof and there are no verbal or written representations, agreements, warranties or promises pertaining to the project matter thereof not expressly incorporated in this writing. Agreement Professional Services Page 4 12. Notice. Any written notices as called for herein may be hand delivered or mailed by certified mail return receipt requested to the respective persons and/or addresses listed above. 13. Non-Discrimination. No discrimination because of race, color, creed, sex, marital status, affectional or sexual orientation, family responsibility, national origin, ancestry, handicap, or religion shall be made in the employment of persons to perform services under this contract. Professional agrees to meet all of the requirements of City's municipal code, Section 13-98, pertaining to non-discrimination in employment. 14. Waiver. The waiver by the City of any term,covenant, or condition hereof shall not operate as a waiver of any subsequent breach of the same or any other term. No term,covenant, or condition of this Agreement can be waived except by the written consent of the City, and forbearance or indulgence by the City in any regard whatsoever shall not constitute a waiver of any term, covenant, or condition to be performed by Professional to which the same may apply and, until complete performance by Professional of said term, covenant or condition, the City shall be entitled to invoke any remedy available to it under this Agreement or by law despite any such forbearance or indulgence. 15. Execution of Agreement by City. This Agreement shall be binding upon all parties hereto and their respective heirs, executors, administrators, successors, and assigns. Notwithstanding anything to the contrary contained herein, this Agreement shall not be binding upon the City unless duly executed by the Mayor of the City of Aspen (or a duly authorized official in his absence) following a Motion or Resolution of the Council of the City of Aspen authorizing the Mayor (or a duly authorized official in his absence)to execute the same. 16. Illegal Aliens—CRS 8-17.5-101 & 24-76.5-101. (a) Purpose. During the 2006 Colorado legislative session, the Legislature passed House Bills 06-1343 (subsequently amended by HB 07-1073) and 06-1023 that added new statutes relating to the employment of and contracting with illegal aliens. These new laws prohibit all state agencies and political subdivisions, including the City of Aspen, from knowingly hiring an illegal alien to perform work under a contract, or to knowingly contract with a subcontractor who knowingly hires with an illegal alien to perform work under the contract. The new laws also require that all contracts for services include certain specific language as set forth in the statutes. The following terms and conditions have been designed to comply with the requirements of this new law. (b) Definitions. The following terms are defined in the new law and by this reference are incorporated herein and in any contract for services entered into with the City of Aspen. "Basic Pilot Program" means the basic pilot employment verification program created in Public Law 208, 104th Congress, as amended, and expanded in Public Law 156, 108th Congress, as amended, that is administered by the United States Department of Homeland Security. Agreement Professional Services Page 5 "Public Contract for Services"means this Agreement. "Services" means the furnishing of labor, time, or effort by a Contractor or a subcontractor not involving the delivery of a specific end product other than reports that are merely incidental to the required performance. (c) By signing this document, Professional certifies and represents that at this time: (i) Professional shall confirm the employment eligibility of all employees who are newly hired for employment in the United States; and (ii) Professional has participated or attempted to participate in the Basic Pilot Program in order to verify that new employees are not employ illegal aliens. (d) Professional hereby confirms that: (i) Professional shall not knowingly employ or contract new employees without confirming the employment eligibility of all such employees hired for employment in the United States under the Public Contract for Services. (ii) Professional shall not enter into a contract with a subcontractor that fails to confirm to the Professional that the subcontractor shall not knowingly hire new employees without confirming their employment eligibility for employment in the United States under the Public Contract for Services. (iii) Professional has verified or has attempted to verify through participation in the Federal Basic Pilot Program that Professional does not employ any new employees who are not eligible for employment in the United States; and if Professional has not been accepted into the Federal Basic Pilot Program prior to entering into the Public Contract for Services, Professional shall forthwith apply to participate in the Federal Basic Pilot Program and shall in writing verify such application within five (5) days of the date of the Public Contract. Professional shall continue to apply to participate in the Federal Basic Pilot Program and shall in writing verify same every three (3) calendar months thereafter, until Professional is accepted or the public contract for services has been completed, whichever is earlier. The requirements of this section shall not be required or effective if the Federal Basic Pilot Program is discontinued. (iv) Professional shall not use the Basic Pilot Program procedures to undertake pre-employment screening of job applicants while the Public Contract for Services is being performed. (v) If Professional obtains actual knowledge that a subcontractor performing work under the Public Contract for Services knowingly employs or contracts with a new employee who is an illegal alien, Professional shall: Agreement Professional Services Page 6 (1) Notify such subcontractor and the City of Aspen within three days that Professional has actual knowledge that the subcontractor has newly employed or contracted with an illegal alien; and (2) Terminate the subcontract with the subcontractor if within three days of receiving the notice required pursuant to this section the subcontractor does not cease employing or contracting with the new employee who is an illegal alien; except that Professional shall not terminate the Public Contract for Services with the subcontractor if during such three days the subcontractor provides information to establish that the subcontractor has not knowingly employed or contracted with an illegal alien. (vi) Professional shall comply with any reasonable request by the Colorado Department of Labor and Employment made in the course of an investigation that the Colorado Department of Labor and Employment undertakes or is undertaking pursuant to the authority established in Subsection 8-17.5-102 (5), C.R.S. (vii) If Professional violates any provision of the Public Contract for Services pertaining to the duties imposed by Subsection 8-17.5-102, C.R.S. the City of Aspen may terminate the Public Contract for Services. If the Public Contract for Services is so terminated, Contractor shall be liable for actual and consequential damages to the City of Aspen arising out of Professional's violation of Subsection 8-17.5-102, C.R.S. (ix) If Professional operates as a sole proprietor, Professional hereby swears or affirms under penalty of perjury that the Professional (I) is a citizen of the United States or otherwise lawfully present in the United States pursuant to federal law, (2) shall comply with the provisions of CRS 24-76.5-101 et seq., and (3) shall produce one of the forms of identification required by CRS 24-76.5-103 prior to the effective date of this Agreement. 16. Warranties Against Contingent Fees, Gratuities, Kickbacks and Conflicts of Interest. (a) Professional warrants that no person or selling agency has been employed or retained to solicit or secure this Contract upon an agreement or understanding for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees or bona fide established commercial or selling agencies maintained by the Professional for the purpose of securing business. (b) Professional agrees not to give any employee of the City a gratuity or any offer of employment in connection with any decision, approval, disapproval, recommendation, preparation of any part of a program requirement or a purchase request, influencing the content of any specification or procurement standard, rendering advice, investigation, auditing, or in any other advisory capacity in any proceeding or application, request for Agreement Professional Services Page 7 ruling, determination, claim or controversy, or other particular matter, pertaining to this Agreement, or to any solicitation or proposal therefore. (c) Professional represents that no official, officer, employee or representative of the City during the term of this Agreement has or one (1) year thereafter shall have any interest, direct or indirect, in this Agreement or the proceeds thereof, except those that may have been disclosed at the time City Council approved the execution of this Agreement. (d) In addition to other remedies it may have for breach of the prohibitions against contingent fees, gratuities, kickbacks and conflict of interest, the City shall have the right to: 1. Cancel this Purchase Agreement without any liability by the City; 2. Debar or suspend the offending parties from being a Professional, contractor or subcontractor under City contracts; 3. Deduct from the contract price or consideration, or otherwise recover, the value of anything transferred or received by the Professional; and 4. Recover such value from the offending parties. 17. Fund Availability. Financial obligations of the City payable after the current fiscal year are contingent upon funds for that purpose being appropriated, budgeted and otherwise made available. If this Agreement contemplates the City utilizing state or federal funds to meet its obligations herein, this Agreement shall be contingent upon the availability of those funds for payment pursuant to the terms of this Agreement. 18. General Terms. (a) It is agreed that neither this Agreement nor any of its terms, provisions, conditions, representations or covenants can be modified, changed, terminated or amended, waived, superseded or extended except by appropriate written instrument fully executed by the parties. (b) If any of the provisions of this Agreement shall be held invalid, illegal or unenforceable it shall not affect or impair the validity, legality or enforceability of any other provision. (c) The parties acknowledge and understand that there are no conditions or limitations to this understanding except those as contained herein at the time of the execution hereof and that after execution no alteration, change or modification shall be made except upon a writing signed by the parties. (d) This Agreement shall be governed by the laws of the State of Colorado as from time to time in effect. Agreement Professional Services Page 8 IN WITNESS WHEREOF, the parties hereto have executed, or caused to be executed by their duly authorized officials, this Agreement in three copies each of which shall be deemed an original on the date first written above. CITY F ASPEN,COLORADO: PROFESSIONAL: [Signature] d11 By: .TM :/ •!t.'1 UL B John A . a ll a A, [Name] [Name] eJ Title: ' Ma Ate my Title: As 5=C-it/ e 1/ Ares:d ens/- Date: V/ Q^ / Z _ Date: in a r o( 13, 2-71e- Approved as to form: tty Attorney's Office Agreement Professional Services Page 9 Exhibit A Professional Services Agreement City of Aspen ncmrs Business Plan Development for City of Aspen Water Fund • Proposal Red Oak has developed an approach to address the Water Fund business plan study as summarized in Figure 1. Included is our understanding of key project issues to be addressed followed by a proposed project approach and scope of work by task area a` identified in the Water Fund business plan { Utility __ - y Cost request for proposals. Revenue Rates Requirements Allocation PROJECT UNDERSTANDING ty O -;—y Capital Cost Requirements The City reviews and updates the annual Water Fund user requirements over a ten-year period, Figure t.Our proven process results in most recently provided in the City's 2012 budget. Concurrent to this equitable rate rates and fees providing a stable funding source to maintain service project,the City is updating the asset management program (AMP), levels. including annual capital requirements over the ten-year study period to be finalized by July 2012.While the City does not anticipate significant changes to the annual capital cost requirements in the near-term, changes to the capital requirements over the ten-year study period are anticipated. The initial AMP that is part of the current ten-year Water Fund financial plan provided as part of the initial data request will be incorporated in the rate model.The rate model will be updated in July 2012 based on the revised AMP to finalize the Water Fund business plan revenue requirements summary. Stable Capital Cost Funding and Recovery Capital cost funding and recovery through Utility Investment . Charges(UICs) and demand charges is a key study item. The long- standing practice has been to allocate and recover a minimum of 60% of annual capital costs from one-time UICs with remaining costs recovered from customer demand charges. This approach has adequately recovered capital costs providing the Water Fund with a stable source of revenue to fund annual requirements until the last few years.As redevelopment and new growth slowed starting in 2007, the revenue generated from one-time UICs has decreased and this source has not provided 60% of annual capital costs increasing the requirements funded through demand charges. Furthermore, redevelopment-based UICs, net of credits, are not 6600555 mm/coy Pathways to Lasting Solutions • RED +l'(INN It TING City of Aspen 3-2 Business Plan Development for City of Aspen Water Fund , , • anticipated to return to historical levels even when overall growth is anticipated to increase We will work with Utility staff to evaluate modifications to the percent of capital costs funded through UICs and demand charges to improve stability of capital funding and amount of annual revenue • recovered. Rate and Fee Cost Recovery Updating Water Fund specialty Rate and fee cost recovery updates are the third key study item to rates and fees to provide stable maintain existing service levels while meeting future revenue funding for O&M and capital cost requirements.The City recovers annual user charge requirements requirements are the primary study through a variety a fixed and variable charges including: objectives. • Fixed demand and fire protection charges per Equivalent ----- — Capacity Unit(ECU) adjusted for each of the seven billing areas Metered water rates for general potable, contract based potable, raw and snowmaking water service ▪ Pumping surcharges are also based on the number of pumps used to provide metered water service • Other miscellaneous fees and charges Red Oak completed the most recent Water Fund business plan study in 2006 and the City last increased water rates in 2012 by 5%. We will work with Utility staff to update this rate model to allocate annual revenue requirements among system cost components and specialty rate and fee types, projected service demand units and the unit cost of providing each specialty rate and fee type. Revenue requirements for 2013 will be the focus of this analysis with the functionality to evaluate alternative test-year requirements. Additional fees for service will also be reviewed to update for overall cost recovery. Many charges have not been modified in several years. For example, we will work with Utility staff to document the labor and material costs associated with the utility hook-up activities and compare these costs to the revenue recovered through current hook-up charges. Revenues from these miscellaneous charges and fees, including UICs and additional income,will offset annual Water Fund fixed and variable charges for scenarios developed. The revised cost allocation and service requirements analysis will be summarized for each water specialty rate and fee to calculate revenue over or under recovered through user charges and presented to the City. 58005557 0003/COL Pathways to Lasting Solutions • IUD Ct Wit)L T I NO L City of Aspen 3 Business Plan Development for City of Aspen Water Fund I 1 PROJECT APPROACH We propose the following approach to meet the Water Fund business plan requirements outlined in the RFP and our understanding of the primary study objectives. The enclosed work plan in Section 4 summarizes the task analysis,deliverables and schedule timeline to complete the project approach outlined below. Stable revenue for capital funding, equitable cost allocation by specialty rate and fee type and adequate rate and fee recovery to maintain service levels are the primary study objectives. Task 1 -- Project Management Red Oak has selected John Gallagher as its Project Manager and Rick Giardina as Manager of Quality Assurance and Quality Control (QA/QC) for this study. Mr. Gallagher has served in similar capacities in previous study engagement over the past 10 years As Project Manager, Mr. Gallagher will serve as the primary contact •� between Red Oak and the City. He will be assisted by Zach Demko in the day-to-day development of study deliverables working directly • with Utility staff. Task 2 —Project Orientation and Data Acquisition Red Oak will facilitate a project orientation workshop with Utility staff to: ■ Confirm study goals ■ Discuss City's cost allocation and rate and fee pricing and modeling objectives ■ Discuss issues that have occurred since previous business plan update in 2006 • Discuss capital cost recovery as a percent of UICs and demand charges, recent customer water use trends and identify issues _. that might impact this study cspo wit ■ Discuss capital recovery approaches and facility information to ' o�s 'I� update UICs -Ino.. - -.� „tip ■ Confirm the areas of City Water Fund ordinances to review for 1 ' accuracy and consistency to be reviewed by us during the Task 4 analysis ■ Confirm our understanding of City's current practices and procedures in developing and implementing rates and fees Revenue Stability • Review data received prior to the meeting and discuss additional information that may be needed to complete the study 68005557 0003/COL Pathways to Lasting Solutions • l&FI) C t)N d.JI I IN6 City of Aspen v Business Plan Development for City of Aspen Water Fund Finalize the work plan, schedule and required deliverables A summary of the work plan is shown in Section 4, including a key milestones and deliverable dates. Prior to the project orientation workshop, Red Oak will provide a detailed data request list that will identify the information needed to complete the various analyses. Task 3 -Summarize Water Fund Revenue Requirements Developing effective cost of service and rate and fee recommendations to address the City's water needs requires an understanding of the Water Fund's current financial condition, future goals and objectives, as well as potential challenges to those efforts.The knowledge and results developed under Tasks 3 and 4 Annual revenue requirements and will serve as the foundation for the subsequent cost of service, rate revenue under existing rates and structure, and rate design modeling and analyses. fees will serve as the foundation for cost of service and rate and fee We will work with Utility staff to summarize annual operating and structure alternatives developed in capital cost revenue requirements over the ten-year study period the City subsequent tasks. usin g y provided multi-year financial plans. Uncertainties and • variables affecting future costs will be identified. Our review of the multi-year financial plan will be limited to the following areas: • Current operation and maintenance (O&M) expenses adjusted for inflation and growth and new O&M for separate City initiatives • Projected annual capital requirements and capital funding from Ul Cs and demand charges N Customer growth and projected water revenues by specialty rate and fee type • Confirmation that the financial plan meets the City's reserve and debt service requirements and other financial policies identified in Task 1. Task 4—Analyze Rate Recovery under Existing Rate and Fee System We will incorporate customer billing information, water use and revenue projections into the rate model to evaluate over and under recovery of revenue completed in Task 5. To complete the rate recovery analysis under existing rate and fees, we will analyze City provided customer billing, ECU by billing area and historical potable, raw and snow making water usage 88005557 0003/COL Pathways to Lasting Solutions • REP l (HV5(_I L l I i\IG Mums. . City of Aspen * 3-5 Business Plan Development for City of Aspen Water Fund information to evaluate revenue under current user charges, adjusted for growth. • A usage distribution analysis will be completed for potable water customer water use per ECU for use in projecting revenue under the current tiered rate structure. The accuracy of historical billing data will be reconciled through a comparison of revenue from existing rates using historical billing data with revenue actually billed and received during that period. ■ Revenue Analysis. Using the customer usage characteristics developed, we will calculate revenue under current rates for the study period on a specialty rate and fee type and ECU basis applying the City's current rate structure. We will compare the projected revenue resulting from the following existing specialty rates and fees: A bill frequency analysis of water • Snowmaking services use per ECU will be developed to • Raw water services evaluate alternative water rate structures and summarize • Metered and unmetered potable water services customer bill impacts. • Pumping services — j • UICs • • Utility hook-up charges The primary Task 3 and 4 deliverable includes a summary of revenue requirements by service area adjusted for City projected rate adjustments and revenue under current rates by year adjusted for customer growth. Task 5: Analyze Specialty Rates Cost Allocation Analysis Building upon the revenue requirements allocation and customer usage by specialty rate and fee type and other information developed in Tasks 3 and 4,we will: ■ Complete a cost-of-service analysis allocating annual revenue requirements to each water specialty rate and fee type to evaluate the cost of providing service. ■ Compare revenue generated from existing rates and fees for each specialty rate and fee evaluated to the cost of service. The goal of the cost-of-service analysis is to allocate the cost included in the annual revenue requirements associated with providing water service to each specialty rate and fee based on cost causation principles. 66005557 0003)COL Pathways to Lasting Solutions • RED ((.)NM I I I IN(, 6 NUgt . City of Aspen 3-6 Business Plan Development for City of Aspen Water Fund Three cost analysis approaches will be used to evaluate the cost of providing different water service. Under the first approach: ■ Red Oak will allocate annual cost of service to specialty rate and fee as follows: • Potable demand charges • • Fire protection services • Raw water service deliveries • Snowmaking services • Potable metered and unmetered water services provided to general and contract customers • Pumping ■ Allocate operating and capital costs to functional cost components: source of supply,water treatment, potable water transmission and distribution, raw water transmission and distribution, pumping, customer service and billing and fire Three cost analysis approaches protection. will be used to evaluate the cost of • Project annual units of service for each specialty rate and fee providing specialty rate and fee using historical data adjusted for growth developed in Task 4. • areas, • Distribute functionalized specialty rate and fees and billing areas in proportion to develop units of service by specialty rate and fee. A direct cost allocation approach, the second approach, will be used to analyze level of effort of typical utility personnel involved in utility hook-up and other miscellaneous fees indentified in Task 1 for evaluation. For utility hook-up charges, the cost of labor and the cost of materials associated with hooking up a new utility customer will be summarized and compared to the current charges to identify over or under recovery of the cost of the service provided. The third approach that will be used to evaluate capital costs recovered through UICs for Utility services. Three factors will be used to evaluate the UiCs by billing service area. 1. Summarize water capital facilities by water service type identifying those serving potable water customers and subject to UIC cost recovery. 2. Analyze total system ECU capacity to be recovered by Ul Cs. 3. Update the cost per ECU of providing potable water service. 66005557 0003/COL Pathways to Lasting Solutions ' PJJ) t<)•til I I i l Ni( 0 mum low City of Aspen Business Plan Development for City of Aspen Water Fund 3-7 Revenue generated from current rates and charges, adjusted for changes in customer service units or growth,will be compared to the cost of providing each water specialty rate and fee. Results will be completed in the timeline summarized in the work plan in Section 4. Preliminary analysis models and results will be adjusted to incorporate updates to annual capital requirements resulting from the City's AMP anticipated to be completed in July 2012. The findings of the tasks 3 through 5 will be summarized in a report chapter. The report chapter will provide a discussion of existing policies and over and under recovery of revenue requirements for each specialty rate and fee. Task 6 s Rate and Fee Systems Using the updated rate models developed in Tasks 3 through 5 to facilitate rate and fee design and rate structure decision-making, Red Oak will develop rates that: 1. Provide adequate revenue to meet annual revenue requirements by specialty rate and fee. 2. Are fair and equitable reflecting the service provided. 3. Are understandable by the City's customers. 4. Are compliant with current City policies and practices, customer contracts, and consistent with City pricing objectives. The updated rate models developed in Tasks 3 through 6 will be able to: Rate models updated during this o* Calculate rates under different scenarios study may be used by Utility staff a Incorporate revenue requirements summary over the 10-year to complete future rate evaluations planning horizon with ability to change certain standard _ assumptions by year • Calculate rates for multiple years and update rates annually i Include schedules and/or tables that show projected cost impacts on different types of customers and for different levels of usage ▪ Be easily updated by City staff for future rate evaluations Key elements of the rate design process are: 66005557 0003/COL Pathways to Lasting Solutions • I i t I 1 CONSUL II NG .A MUIOK . City of Aspen , Business Plan Development for City of Aspen Water Fund • 8 • Cost-of-service Provided. The cost of service analysis compared to existing rate and fee revenue by for specialty rates and fees. • Pricing Objectives.We will identify pricing objectives with City staff in Task Pricing Objectives 2, reviewed with City Council in the first meeting and develop rate and fees that Revenue Effective in providing stable,reliable revenue stream to recover best meet the City needs and Stability revenue requirements in the face of variable external factors such as weather and tourism. objectives. Objectives such as conservation, revenue stability, and Equitability Developing rates so that each customer's water bill equals Ike cost avoidance of rate shock are often key borne by the City in providing the sery ce. issues for stakeholders. Our analysis will help the City align rates in support 411111 water Effective in promoting efficient use of resources. p y g pp Conservation of overall goals. ® Peak Usage Assigns cost of providing peaking facilities to customers having • Water Rate and Fee Structure Reduction significant peak to average water use patterns,l.e,discourages water Review. The City uses a tiered use during periods of peak demand. approach to its potable water rates and Legally Meets all known legal standards and requirements with minimum uniform rate structure for raw, Compliant potential for successful legal challenge. • snowmaking and pumping charges; we - — will develop water rates by specialty rate and fee using both of these structures, as appropriate, recognizing conservation, revenue stability and the City's other pricing objectives in proposing changes. • UICs Update.We will update UICs based on objectives developed in Task 1 and facilities providing service to new potable water customers developed in Task 5 to support recommended changes to the current UICs ■ Capital Cost Funding. We will update demand and fire • protection service charges to recover the percent of capital facilities recovered providing a stable revenue stream to fund annual capital requirements. Red Oak will facilitate discussions with City Council to finalize rate • and fees that meet City objectives. The deliverables of this task will be staged supporting presentations to City Council discussed in Task 7. Preliminary rate and fee recommendations developed in this task will be presented to City Council. Additional scenarios identified through discussions with City Council during meeting 1 will be developed and refined for presentation in meeting 2. Additional analysis and refinement will be completed to develop final rate and fee recommendations reflecting direction in meeting 2 and presented to City Council in meeting 3. Task 7 City Council Meetings and Report Red Oak will work with Utility to complete the preliminary and subsequent study analyses. The following presentations to City Council are anticipated as outlined in the work plan as follows: 660o5557 00031 COL Pathways to Lasting Solutions • RFD C(.)N1t I I I.Nt. at rows, City of Aspen • 3 9 Business Plan Development for City of Aspen Water Fund • Meeting 1 —Present preliminary findings on existing rate and fee systems and receive input regarding scenarios for further evaluation. • Meeting 2—Present detailed scenario analysis identified in { meeting 1 for further evaluation and receives final direction from City Council a Meeting 3—Present rate and fee recommendations resulting from Task 6 evaluation and scenarios identified in Meeting 2. Task 8 Study Findings and Report Preliminary,scenario and final Preliminary and final study findings will be summarized in following study recommendations will be study reports identified in the work plan in Section 4: presented to City Council over to Report chapters summarizing preliminary Tasks 3 through 5 three planned meetings and findings in conjunction with City Council Meeting 1. documented in study report II Report chapters summarizing scenario results requested in Meeting 1 and preliminary rate and fee selection criteria to be presented during Meeting 2 S Draft study report and recommendations presented to City Council in Meeting 3. ■ Final report issued at the completion of the study. Task 9 Ordinance Development We will review of City updated rate and fee ordinances prior to finalizing ordinance revisions incorporating the recommended specialty rate and fees included in the final study report. Additional Services We will provide additional services above those included in the project approach and work plan for additional fees as requested by the City. Examples of additional services include the following: • Changes to current ECU schedule based on water fixtures and equivalency ratings to develop customer ECUs. S Billing area definition or weightings applied to rates and fees. • Multi-year financial plans and/or financial planning scenarios developed for the Water Fund. a Additional fee analyses above those included in the project approach and work plan. • Additional meetings with Utility staff and/or City Council above the four total meetings included in Tasks 2 and 7. The cost to attend additional City Council meetings, including reimbursable travel expenses is approximately$5,100 per meeting. 680055570003/col Pathways to Lasting Solutions • RFD • ( )N11.11 I INK 111L t�_ City of Aspen r�� , a,:,., Business Plan Development for City of Aspen Water Fund ., 4 Work Plan and Timeline Project Management • Resource management = invoices ° Continuous • Financial management Status reports Project Orientation • Study expectations ° Project orientation , April 2,2012 Policies workshop • Pricing objectives • Technical memorandum • Communication procedures • Study schedule • Data request Revenue Requirements • Long range plan • Cost by water service type • May 28,2012 • Operating expenses • Capital funding • Preliminary and updated AMP - Uncertainties and variables affecting long range plan Existing Rate and Fee • Customer water use,ECUs • Revenue under existing • June 11,2012 Systems • Bill frequency analysis rates by water service type • Service requirements Specialty Rates • Cost of service by specialty rate and fee ° Water service deposits • April 30,2012 service area ° Utility hook-up charges • May14,2012 • Utility hook-up and other miscellaneous • Snowmaking rates • May 28,2012 service evaluation • UIC cost update for potable water services • Raw water rates • June 11,2012 ▪ Treated water rates • June 25,2012 • Pumping charges • July 9,2012 • UICs • July 23,2012 • Final summary cost of • August 6,2012 service and comparison to revenue under existing rates Proposed Rate and Fee • Recommend scenarios which best meet - Final rate and fees for ° October 31,2012 Systems selection criteria adoption o Identify factors causing cross purposes and conflicting requirements Meetings • Existing rate and fee system analysis,Identify a City Council Meeting 1 • August 2012 alternative scenarios Refined rate and fee structure alternatives ° City Council Meeting 2 • September 2012 • Final rate and fee structure for adoption ° City Council Meeting 3 • October 2012 Reports Existing rate and fee ' August 13,2012 system analysis • Scenario and selection ' August 31,2012 criteria summary • Draft report findings and „ September 30.2012 recommendations • Final report - October 31,2012 Ordinance Development ° Final ordinance review • Final ordinance review - November 7,2012 summary 66005557 00031 Col Pathways to Lasting Solutions • p,I I 1 CO NN II VIM 6 MILOS Exhibit B Professional Services Agfeement Ili TIE Chv of AgEN .� s )° ' Costs COST PROPOSAL Red Oak proposes to perform the work plan by task for a not-to- exceed fee of$88,390 as outlined below. Task Gallagher Giardina Demko Professional Expenses Cost Services $255 $290 $158 $90 1 12 0 0 12 24 $4,140 $0 $4,140 2 16 0 16 4 36 6,968 1,672 8,640 3 4 0 10 0 14 2,600 0 2,600 4 8 0 40 0 48. 8,360 0 8,360 5 16 2 40 0 58 10,980 0 10,980 6 24 4 80 0 108 19,920 0 19,920 7 36 2 20 8 66 13,640 1,716 15,356 8 32 2 40 , 8 82 15,780 330 16,110 9 4 0 8 0 12 2,284 0 2,284 Total 152 10 254 32 448 $84,672 $3,718 $88,390 We will prepare invoices monthly due within 30 days of the invoice date. Expenses will include reimbursable travel for project meetings and shipping costs of project activities. , 68005557.0003/COL Pathways to Lasting Solutions . '' RED)',l:CONSULTING • LA AACAQIS "