HomeMy WebLinkAboutC-9046-1 - PSA for City Sewer Rate and Water Rate StudiesPROFESSIONAL SERVICES AGREEMENT
WITH BLACK & VEATCH MANAGEMENT CONSULTING, LLC FOR
CITY SEWER RATE AND WATER RATE STUDIES
THIS PROFESSIONAL SERVICES AGREEMENT ("Agreement") is made and
entered into as of this 1st day of December, 2022 ("Effective Date"), by and between the
CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("City"),
and BLACK & VEATCH MANAGEMENT CONSULTING, LLC, a Kansas Limited Liability
Company ("Consultant"), whose address is 11401 Lamar Avenue, Overland Park, KS
66211, and is made with reference to the following:
RECITALS
A. City is a municipal corporation duly organized and validly existing under the laws
of the State of California with the power to carry on its business as it is now being
conducted under the statutes of the State of California and the Charter of City.
B. City desires to engage Consultant to conduct the City's 2023 Sewer and Water
Rate Studies ("Project").
C. Consultant possesses the skill, experience, ability, background, certification and
knowledge to provide the professional services described in this Agreement.
D. City has solicited and received a proposal from Consultant, has reviewed the
previous experience and evaluated the expertise of Consultant, and desires to
retain Consultant to render professional services under the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties
as follows:
1. TERM
The term of this Agreement shall commence on the Effective Date, and shall
terminate on December 31, 2024, unless terminated earlier as set forth herein.
2. SERVICES TO BE PERFORMED
Consultant shall diligently perform all the services described in the Scope of
Services attached hereto as Exhibit A and incorporated herein by reference ("Services"
or "Work"). City may elect to delete certain Services within the Scope of Services at its
sole discretion.
3. TIME OF PERFORMANCE
3.1 Time is of the essence in the performance of Services under this Agreement
and Consultant shall perform the Services in accordance with the schedule included in
Exhibit A. In the absence of a specific schedule, the Services shall be performed to
completion in a diligent and timely manner. The failure by Consultant to strictly adhere to
the schedule set forth in Exhibit A, if any, or perform the Services in a diligent and timely
manner may result in termination of this Agreement by City.
3.2 Notwithstanding the foregoing, Consultant shall not be responsible for
delays due to causes beyond Consultant's reasonable control. However, in the case of
any such delay in the Services to be provided for the Project, each party hereby agrees
to provide notice within two (2) calendar days of the occurrence causing the delay to the
other party so that all delays can be addressed.
3.3 Consultant shall submit all requests for extensions of time for performance
in writing to the Project Administrator as defined herein not later than ten (10) calendar
days after the start of the condition that purportedly causes a delay. The Project
Administrator shall review all such requests and may grant reasonable time extensions
for unforeseeable delays that are beyond Consultant's control.
3.4 For all time periods not specifically set forth herein, Consultant shall
respond in the most expedient and appropriate manner under the circumstances, by
hand -delivery or mail.
4. COMPENSATION TO CONSULTANT
4.1 City shall pay Consultant for the Services on a time and expense not -to -
exceed basis in accordance with the provisions of this Section and the Schedule of Billing
Rates attached hereto as Exhibit B and incorporated herein by reference. Consultant's
compensation for all Work performed in accordance with this Agreement, including all
reimbursable items and subconsultant fees, shall not exceed One Hundred One
Thousand Two Hundred Forty -Four Dollars and 00/100 ($101,244.00). Additionally,
the City has allocated a contingency amount of Eighteen Thousand Seven Hundred
Fifty -Six Dollars and 00/100 ($18,756) for unexpected costs or Extra Work for a total not
to exceed amount of One Hundred Twenty Thousand Dollars and 001100
($120,000.00). No portion of the contingency shall be expended without prior written
authorization by City's Project Administrator. No billing rate changes shall be made during
the term of this Agreement without the prior written approval of City.
4.2 Consultant shall submit monthly invoices to City describing the Work
performed the preceding month. Consultant's bills shall include the name of the person
who performed the Work, a brief description of the Services performed and/or the specific
task in the Scope of Services to which it relates, the date the Services were performed,
the number of hours spent on all Work billed on an hourly basis, and a description of any
reimbursable expenditures. City shall pay Consultant no later than thirty (30) calendar
days after approval of the monthly invoice by City staff.
4.3 City shall reimburse Consultant only for those costs or expenses specifically
identified in Exhibit B to this Agreement or specifically approved in writing in advance by
City.
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4.4 Consultant shall not receive any compensation for Extra Work performed
without the prior written authorization of City. As used herein, "Extra Work" means any
Work that is determined by City to be necessary for the proper completion of the Project,
but which is not included within the Scope of Services and which the parties did not
reasonably anticipate would be necessary at the execution of this Agreement.
Compensation for any authorized Extra Work shall be paid in accordance with the
Schedule of Billing Rates as set forth in Exhibit B. In the event City requires Extra Work,
the Consultant shall provide City's Project Administrator with advance written notice of
the applicable Billing Rates to complete the Extra Work for City to provide Consultant with
written authorization to perform the Extra Work.
5. PROJECT MANAGER
5.1 Consultant shall designate a Project Manager, who shall coordinate all
phases of the Project. This Project Manager shall be available to City at all reasonable
times during the Agreement term. Consultant has designated Ann Bui to be its Project
Manager. Consultant shall not remove or reassign the Project Manager or any personnel
listed in Exhibit A or assign any new or replacement personnel to the Project without the
prior written consent of City. City's approval shall not be unreasonably withheld with
respect to the removal or assignment of non -key personnel.
5.2 Consultant, at the sole discretion of City, shall remove from the Project any
of its personnel assigned to the performance of Services upon written request of City.
Consultant warrants that it will continuously furnish the necessary personnel to complete
the Project on a timely basis as contemplated by this Agreement.
5.3 If Consultant is performing inspection services for City, the Project Manager
and any other assigned staff shall be equipped with a cellular phone to communicate with
City staff. The Project Manager's cellular phone number shall be provided to City.
6. ADMINISTRATION
This Agreement will be administered by the Utilities Department. City's Utilities
Director or designee shall be the Project Administrator and shall have the authority to act
for City under this Agreement. The Project Administrator shall represent City in all matters
pertaining to the Services to be rendered pursuant to this Agreement.
7. CITY'S RESPONSIBILITIES
To assist Consultant in the execution of its responsibilities under this Agreement,
City agrees to provide access to and upon request of Consultant, one copy of all existing
relevant information on file at City. City will provide all such materials in a timely manner
so as not to cause delays in Consultant's Work schedule.
8. STANDARD OF CARE
8.1 All of the Services shall be performed by Consultant or under Consultant's
supervision. Consultant represents that it possesses the professional and technical
Black & Veatch Management Consulting, LLC Page 3
personnel required to perform the Services required by this Agreement, and that it will
perform all Services in a manner commensurate with community professional standards
and with the ordinary degree of skill and care that would be used by other reasonably
competent practitioners of the same discipline under similar circumstances. All Services
shall be performed by qualified and experienced personnel who are not employed by City.
By delivery of completed Work, Consultant certifies that the Work conforms to the
requirements of this Agreement, all applicable federal, state and local laws, and legally
recognized professional standards.
8.2 Consultant represents and warrants to City that it has, shall obtain, and shall
keep in full force and effect during the term hereof, at its sole cost and expense, all
licenses, permits, qualifications, insurance and approvals of whatsoever nature that is
legally required of Consultant to practice its profession. Consultant shall maintain a City
of Newport Beach business license during the term of this Agreement.
8.3 Consultant shall not be responsible for delay, nor shall Consultant be
responsible for damages or be in default or deemed to be in default by reason of strikes,
lockouts, accidents, acts of God, or the failure of City to furnish timely information or to
approve or disapprove Consultant's Work promptly, or delay or faulty performance by
City, contractors, or governmental agencies.
9. HOLD HARMLESS
9.1 To the fullest extent permitted by law, Consultant shall indemnify, defend
and hold harmless City, its City Council, boards and commissions, officers, agents,
volunteers and employees (collectively, the "Indemnified Parties") from and against any
and all claims (including, without limitation, claims for bodily injury, death or damage to
property), demands, obligations, damages, actions, causes of action, suits, losses,
judgments, fines, penalties, liabilities, costs and expenses (including, without limitation,
attorneys' fees, disbursements and court costs) of every kind and nature whatsoever
(individually, a Claim; collectively, "Claims"), which may arise from or in any manner relate
(directly or indirectly) to any breach of the terms and conditions of this Agreement, any
Work performed or Services provided under this Agreement including, without limitation,
defects in workmanship or materials or Consultant's presence or activities conducted on
the Project (including the negligent, reckless, and/or willful acts, errors and/or omissions
of Consultant, its principals, officers, agents, employees, vendors, suppliers, consultants,
subcontractors, anyone employed directly or indirectly by any of them or for whose acts
they may be liable, or any or all of them).
9.2 Notwithstanding the foregoing, nothing herein shall be construed to require
Consultant to indemnify the Indemnified Parties from any Claim arising from the sole
negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall
be construed as authorizing any award of attorneys' fees in any action on or to enforce
the terms of this Agreement. This indemnity shall apply to all claims and liability
regardless of whether any insurance policies are applicable. The policy limits do not act
as a limitation upon the amount of indemnification to be provided by Consultant.
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10. INDEPENDENT CONTRACTOR
It is understood that City retains Consultant on an independent contractor basis
and Consultant is not an agent or employee of City. The manner and means of
conducting the Work are under the control of Consultant, except to the extent they are
limited by statute, rule or regulation and the expressed terms of this Agreement. No civil
service status or other right of employment shall accrue to Consultant or its employees.
Nothing in this Agreement shall be deemed to constitute approval for Consultant or any
of Consultant's employees or agents, to be the agents or employees of City. Consultant
shall have the responsibility for and control over the means of performing the Work,
provided that Consultant is in compliance with the terms of this Agreement. Anything in
this Agreement that may appear to give City the right to direct Consultant as to the details
of the performance of the Work or to exercise a measure of control over Consultant shall
mean only that Consultant shall follow the desires of City with respect to the results of the
Services.
11. COOPERATION
Consultant agrees to work closely and cooperate fully with City's designated
Project Administrator and any other agencies that may have jurisdiction or interest in the
Work to be performed. City agrees to cooperate with the Consultant on the Project.
12. CITY POLICY
Consultant shall discuss and review all matters relating to policy and Project
direction with City's Project Administrator in advance of all critical decision points in order
to ensure the Project proceeds in a manner consistent with City goals and policies.
13. PROGRESS
Consultant is responsible for keeping the Project Administrator informed on a
regular basis regarding the status and progress of the Project, activities performed and
planned, and any meetings that have been scheduled or are desired.
14. INSURANCE
Without limiting Consultant's indemnification of City, and prior to commencement
of Work, Consultant shall obtain, provide and maintain at its own expense during the term
of this Agreement or for other periods as specified in this Agreement, policies of insurance
of the type, amounts, terms and conditions described in the Insurance Requirements
attached hereto as Exhibit C, and incorporated herein by reference.
15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS
Except as specifically authorized under this Agreement, the Services to be
provided under this Agreement shall not be assigned, transferred contracted or
subcontracted out without the prior written approval of City. Any of the following shall be
construed as an assignment: The sale, assignment, transfer or other disposition of any
Black & Veatch Management Consulting, LLC Page 5
of the issued and outstanding capital stock of Consultant, or of the interest of any general
partner or joint venturer or syndicate member or cotenant if Consultant is a partnership or
joint -venture or syndicate or co -tenancy, which shall result in changing the control of
Consultant. Control means fifty percent (50%) or more of the voting power or twenty-five
percent (25%) or more of the assets of the corporation, partnership or joint -venture.
16. SUBCONTRACTING
The subcontractors authorized by City, if any, to perform Work on this Project are
identified in Exhibit A. Consultant shall be fully responsible to City for all acts and
omissions of any subcontractor. Nothing in this Agreement shall create any contractual
relationship between City and any subcontractor nor shall it create any obligation on the
part of City to pay or to see to the payment of any monies due to any such subcontractor
other than as otherwise required by law. City is an intended beneficiary of any Work
performed by the subcontractor for purposes of establishing a duty of care between the
subcontractor and City. Except as specifically authorized herein, the Services to be
provided under this Agreement shall not be otherwise assigned, transferred, contracted
or subcontracted out without the prior written approval of City.
17. OWNERSHIP OF DOCUMENTS
17.1 Each and every report, draft, map, record, plan, document and other writing
produced, including but not limited to, websites, blogs, social media accounts and
applications (hereinafter "Documents"), prepared or caused to be prepared by Consultant,
its officers, employees, agents and subcontractors, in the course of implementing this
Agreement, shall become the exclusive property of City, and City shall have the sole right
to use such materials in its discretion without further compensation to Consultant or any
other party. Additionally, all material posted in cyberspace by Consultant, its officers,
employees, agents and subcontractors, in the course of implementing this Agreement,
shall become the exclusive property of City, and City shall have the sole right to use such
materials in its discretion without further compensation to Consultant or any other party.
Consultant shall, at Consultant's expense, provide such Documents, including all logins
and password information to City upon prior written request.
17.2 Documents, including drawings and specifications, prepared by Consultant
pursuant to this Agreement are not intended or represented to be suitable for reuse by
City or others on any other project. Any use of completed Documents for other projects
and any use of incomplete Documents without specific written authorization from
Consultant will be at City's sole risk and without liability to Consultant. Further, any and
all liability arising out of changes made to Consultant's deliverables under this Agreement
by City or persons other than Consultant is waived against Consultant, and City assumes
full responsibility for such changes unless City has given Consultant prior notice and has
received from Consultant written consent for such changes.
17.3 All written documents shall be transmitted to City in formats compatible with
Microsoft Office and/or viewable with Adobe Acrobat.
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18. CONFIDENTIALITY
All Documents, including drafts, preliminary drawings or plans, notes and
communications that result from the Services in this Agreement, shall be kept confidential
unless City expressly authorizes in writing the release of information.
19. INTELLECTUAL PROPERTY INDEMNITY
Consultant shall defend and indemnify City, its agents, officers, representatives
and employees against any and all liability, including costs, for infringement or alleged
infringement of any United States' letters patent, trademark, or copyright, including costs,
contained in Consultant's Documents provided under this Agreement.
20. RECORDS
Consultant shall keep records and invoices in connection with the Services to be
performed under this Agreement. Consultant shall maintain complete and accurate
records with respect to the costs incurred under this Agreement and any Services,
expenditures and disbursements charged to City, for a minimum period of three (3) years,
or for any longer period required by law, from the date of final payment to Consultant
under this Agreement. All such records and invoices shall be clearly identifiable.
Consultant shall allow a representative of City to examine, audit and make transcripts or
copies of such records and invoices during regular business hours. Consultant shall allow
inspection of all Work, data, Documents, proceedings and activities related to the
Agreement for a period of three (3) years from the date of final payment to Consultant
under this Agreement.
21. WITHHOLDINGS
City may withhold payment to Consultant of any disputed sums until satisfaction of
the dispute with respect to such payment. Such withholding shall not be deemed to
constitute a failure to pay according to the terms of this Agreement. Consultant shall not
discontinue Work as a result of such withholding. Consultant shall have an immediate
right to appeal to. the City Manager or designee with respect to such disputed sums.
Consultant shall be entitled to receive interest on any withheld sums at the rate of return
that City earned on its investments during the time period, from the date of withholding of
any amounts found to have been improperly withheld.
22. ERRORS AND OMISSIONS
In the event of errors or omissions that are due to the negligence or professional
inexperience of Consultant which result in expense to City greater than what would have
resulted if there were not errors or omissions in the Work accomplished by Consultant,
the additional design, construction and/or restoration expense shall be borne by
Consultant. Nothing in this Section is intended to limit City's rights under the law or any
other sections of this Agreement.
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23. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS
City reserves the right to employ other Consultants in connection with the Project.
24. CONFLICTS OF INTEREST
24.1 Consultant or its employees may be subject to the provisions of the
California Political Reform Act of 1974 (the "Act") and/or Government Code §§ 1090 et
sec.., which (1) require such persons to disclose any financial interest that may
foreseeably be materially affected by the Work performed under this Agreement, and (2)
prohibit such persons from making, or participating in making, decisions that will
foreseeably financially affect such interest.
24.2 If subject to the Act and/or Government Code §§ 1090 et seq., Consultant
shall conform to all requirements therein. Failure to do so constitutes a material breach
and is grounds for immediate termination of this Agreement by City. Consultant shall
indemnify and hold harmless City for any and all claims for damages resulting from
Consultant's violation of this Section.
25. NOTICES
25.1 All notices, demands, requests or approvals, including any change in
mailing address, to be given under the terms of this Agreement shall be given in writing,
and conclusively shall be deemed served when delivered personally, or on the third
business day after the deposit thereof in the United States mail, postage prepaid, first-
class mail, addressed as hereinafter provided.
25.2 All notices, demands, requests or approvals from Consultant to City shall
be addressed to City at:
Attn: Utilities Director
Utilities Department
City of Newport Beach
100 Civic Center Drive
PO Box 1768
Newport Beach, CA 92658
25.3 All notices, demands, requests or approvals from City to Consultant shall
be addressed to Consultant at:
Attn: Ann Bui
Black & Veatch Management Consulting, LLC
11401 Lamar Avenue
Overland Park, KS 66211
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26. CLAIMS
Unless a shorter time is specified elsewhere in this Agreement, before making its
final request for payment under this Agreement, Consultant shall submit to City, in writing,
all claims for compensation under or arising out of this Agreement. Consultant's
acceptance of the final payment shall constitute a waiver of all claims for compensation
under or arising out of this Agreement except those previously made in writing and
identified by Consultant in writing as unsettled at the time of its final request for payment.
Consultant and City expressly agree that in addition to any claims filing requirements set
forth in the Agreement, Consultant shall be required to file any claim Consultant may have
against City in strict conformance with the Government Claims Act (Government Code
sections 900 et seq.).
27. TERMINATION
27.1 In the event that either party fails or refuses to perform any of the provisions
of this Agreement at the time and in the manner required, that party shall be deemed in
default in the performance of this Agreement. If such default is not cured within a period
of two (2) calendar days, or if more than two (2) calendar days are reasonably required
to cure the default and the defaulting party fails to give adequate assurance of due
performance within two (2) calendar days after receipt of written notice of default,
specifying the nature of such default and the steps necessary to cure such default, and
thereafter diligently take steps to cure the default, the non -defaulting party may terminate
the Agreement forthwith by giving to the defaulting party written notice thereof.
27.2 Notwithstanding the above provisions, City shall have the right, at its sole
and absolute discretion and without cause, of terminating this Agreement at any time by
giving no less than seven (7) calendar days' prior written notice to Consultant. In the
event of termination under this Section, City shall pay Consultant for Services
satisfactorily performed and costs incurred up to the effective date of termination for which
Consultant has not been previously paid. On the effective date of termination, Consultant
shall deliver to City all reports, Documents and other information developed or
accumulated in the performance of this Agreement, whether in draft or final form.
28. STANDARD PROVISIONS
28.1 Recitals. City and Consultant acknowledge that the above Recitals are true
and correct and are hereby incorporated by reference into this Agreement.
28.2 Compliance with all Laws. Consultant shall, at its own cost and expense,
comply with all statutes, ordinances, regulations and requirements of all governmental
entities, including federal, state, county or municipal, whether now in force or hereinafter
enacted. In addition, all Work prepared by Consultant shall conform to applicable City,
county, state and federal laws, rules, regulations and permit requirements and be subject
to approval of the Project Administrator and City.
28.3 Waiver. A waiver by either party of any breach, of any term, covenant or
condition contained herein shall not be deemed to be a waiver of any subsequent breach
Black & Veatch Management Consulting, LLC Page 9
of the same or any other term, covenant or condition contained herein, whether of the
same or a different character.
28.4 Integrated Contract. This Agreement represents the full and complete
understanding of every kind or nature whatsoever between the parties hereto, and all
preliminary negotiations and agreements of whatsoever kind or nature are merged herein.
No verbal agreement or implied covenant shall be held to vary the provisions herein.
28.5 Conflicts or Inconsistencies. In the event there are any conflicts or
inconsistencies between this Agreement and the Scope of Services or any other
attachments attached hereto, the terms of this Agreement shall govern.
28.6 Interpretation. The terms of this Agreement shall be construed in
accordance with the meaning of the language used and shall not be construed for or
against either party by reason of the authorship of the Agreement or any other rule of
construction which might otherwise apply.
28.7 Amendments. This Agreement may be modified or amended only by a
written document executed by both Consultant and City and approved as to form by the
City Attorney.
28.8 Severability. If any term or portion of this Agreement is held to be invalid,
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement shall continue in full force and effect.
28.9 Controlling Law and Venue. The laws of the State of California shall govern
this Agreement and all matters relating to it and any action brought relating to this
Agreement shall be adjudicated in a court of competent jurisdiction in the County of
Orange, State of California.
28.10 Equal Opportunity Employment. Consultant represents that it is an equal
opportunity employer and it shall not discriminate against any subcontractor, employee
or applicant for employment because race, religious creed, color, national origin,
ancestry, physical handicap, medical condition, marital status, sex, sexual orientation,
age or any other impermissible basis under law.
28.11 No Attorneys' Fees. In the event of any dispute or legal action arising under
this Agreement, the prevailing party shall not be entitled to attorneys' fees.
28.12 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original and all of which together shall
constitute one (1) and the same instrument.
[SIGNATURES ON NEXT PAGE]
Black & Veatch Management Consulting, LLC Page 10
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date:-j I Azad 22--
By: �.. '.
Aaron C. Harp
City Attorney
ATTEST: /^ a��
Date:_.
as
4Mlle OP.
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation
mayor
CONSULTANT: Black & Veatch
Management Consulting, LLC, a Kansas
Limited Liability Company
Date: / -2 / I / � 2-
By: �e
l
Chris J. Klau ner
Associate Vice President
/ '•
• - c1 - —Secretary
[END OF SIGNATURES]
Attachments: Exhibit A — Scope of Services
Exhibit B — Schedule of Billing Rates
Exhibit C — Insurance Requirements
Black & Veatch Management Consulting, LLC Page 11
EXHIBIT A
SCOPE OF SERVICES
Black &Veatch Management Consulting, LLC Page A-1
Proposer's Background
Black & Veatch Holding Company is a leading global engineering,
construction, and consulting company specializing in energy, water, and
telecommunications infrastructure development. Our Mission sets the bar
high - Building a World of Difference®. We live up to this ideal by delivering
reliable and advanced infrastructure solutions to our clients' most complex
challenges, helping to improve and sustain the quality of life around the
world.
Founded in 1915, Black & Veatch is an employee -owned company based in
Overland Park, Kansas, that has over 9,000 professionals operating out of
more than 120 offices worldwide. Through this network of collaboratively
connected offices, we serve our clients and commit ourselves to professional
excellence and innovation. As evidenced by our latest rankings in Engineering
News Record (ENR), Black & Veatch serves as an industry leader. In 2022, we
were ranked No.1 in SolarPower design, No. 2inPower, andholdTop 10
spots for Telecommunications and Environment categories such as Sanitary
and5tormSewers, Water Supply, Water Treatment, and5ewerand Waste.
We're alsoleaders-in more than 15 other categories. Our professionals earn
this recognition by understanding our clients' business needs and objectives.
We have the financial and technical resources to execute projects expertly.
Furthermore, we value long-lasting relationships and believe that rapport
enables superior customer service and support.
Black & Vetch Management Consulting, LLC
Black & Veatch Management Consulting, LLC is a wholly owned subsidiary of
Black & Veatch Holding Company that brings together more than 200
professionals. These professionals include experienced industry executives,
senior analysts, and technology experts from the electric, water, oil, natural
gas, and technology industries. This experience —combined with seamless
access to the company's world -class engineering, procurement, construction
and operations capabilities, experienced senior executives, economists,
senior policy experts and regulatory officials, engineers, and internationally
respected subject -matter experts —makes Black & Veatch especially qualified
to realize the goals of our clients.
Black & Veatch's diverse consulting service offerings span financial, process,
and technology solutions. Our experienced professionals possess cross -
functional skills, including asset management, cost of service/rate design,
business process/workflow analysis, and implementation services. The
following is a summary of the wide range of services Black & Veatch
Management Consulting professionals offer.
PROPRIETARY AND CONFIDENTIAL INFORMATION
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Bpi COP,! BLACK & VEATCH i PROPOSERS BACKGROUND 1
Advanced Metering
Infrastructure (AMI)
AMI Program Management
AMI and Smart Grid
Analytics
Customer Information and
Management
Customer Information
System
Customer Program and
Experience Management
Billing/Customer Service
Operations
Transformation Roadmap
Rate Case Management and
Support Services
FERC Regulatory Support
Performance -Based &
Infrastructure Ratemaking
Alternative Regulation
Services
Financial Planning, Cost of
Service, and Bond Feasibility
Studies
Stormwater Utility
Development and
Implementation Support
Business Operations Reviews
Asset Life Cycle Risk
Management
Asset Performance
Management
Asset Investment Planning
Distribution Asset &
Device Management
Asset Data Management &
Analytics
Enterprise Asset Management
Geographical Information
System
Mobility
Distributed infrastructure
Bankability Studies &
Digital Advisory
Decarbonization Strategic
Planning
Integrated Resource Planning
Clean Power Procurement
Transmission Strategy and
Planning
LNG and Other Fuels Strategic
Planning
Hydrogen Fuels Strategic
Planning
Transport Electrification
Strategic Planning
Grid Mod, DER Integration
Strategic Planning
Program Management (PMO)
Operational Technologies
Electric and Gas OT
Transformation
EMS/ADMS/DERMS/
DRMS/SCADA Business
Integration
Pipeline Management and Gas
Control
Grid Modernization Strategy
and Roadmap
Digital Twin Advisory Support
Independent Engineering /
Technical Due Diligence
Restructuring Advisory
Support
Construction and Operations
Monitoring
Project Development and
Valuations
Electricity and Fuel Price
Forecasting
Qualifications and Experience of
Proposer's Personnel
KEY MEMBERS OF OUR DEDICATED PROJECT TEAM ARE LOCALLY BASED AND BRING THE SYNERGY OF HAVING
WORKING TOGETHER, ENGINEERING KNOWLEDGE OF WASTEWATER SYSTEMS, INDUSTRY BEST PRACTICE RATE
SETTING EXPERTISE, AND CALIFORNIA-SPECIFIC EXPERIENCE TO HELP THE CITY ACHIEVE ITS STUDY OBJECTIVES
Our people are the most important part of our organization. Our cohesive Team will perform under the Project
Manager's leadership, who will be responsive, diligent, and available to serve the City effectively during this study.
Based on our experience in providing financial planning services and management consulting services, we've
selected a team specifically for this project that includes the following critical attributes:
Exceptional Project Management and Thought Leadership to address the City's rate study objectives
and provide pragmatic data -driven rate recommendations.
■ Synergistic Team that has Delivered Similar Projects working together. Our Project Team will be led by
Alberto Morales, the Project Manager, and supported by Ms. Ann Bui, the Project Director.
They are based in Southern California and
have the knowledge and skillset to execute
rate studies under Proposition 218
requirements. They maintain a strong track
record of working together and cohesively
leading project teams to successfully
deliver project results on schedule and
budget.
Together, they have supported over 100
municipalities in building long-term
financial resilience plans and policies,
defensible cost of service analysis, and
alternate rate structures while balancing customer equity and affordability considerations.
The project team is identified in the organizational chart. Our team is excited to assist the City with this study and
is strongly committed to working collaboratively with the City.
Black & Veatch has been solely focused on utility ratemaking for over 80 years. We will bring national
perspectives on new cost -of -service approaches, financial best practices, and couple it with recent
project experience in Southern California. Our team will leverage lessons learned in the post-SJC rate -
making era so that we can help the City avoid common rate -setting pitfalls.
PROPRIETARY AND CONFIDENTIAL INFORMATION
R%J CON) BLACK & VEATCH I QUALIFICATIONS AND EXPERIENCE OF PROPOSER'S PERSONNEL 3
Key Personnel
The following section briefly describes each key team member's experience, expertise, and role in this study.
Complete resumes are available in the Proposed Personnel section.
ROLE: Ann will serve as the Project Director on this study to provide the technical
guidance and leadership, work with the City to achieve the objectives, and ensure
the quality of the analysis and deliverables.
Location: Black & Veatch Los Angeles and Irvine offices
Ann is a Managing Director with Black & Veatch's Global Advisory business. She has over 30 years of experience
with clients over four continents gained through more than 450 engagements, providing financial and business
planning services for public and private utilities. Besides providing clients with strategic financial management
strategies, her responsibilities include driving growth and innovation to utilities in financial and advisory planning,
climate solutions, resiliency and sustainability issues, and asset integrity.
An editor and contributing author of leading American Water Works Association (AWWA) and Water Environment
Federation (WEF) guidance manuals, she will also bring her national experience in helping utilities set financial
reserve policies to the City's project. She is the editor of AWWA's Financial Management for Water Utilities:
Principles of Finance, Accounting, and Management Controls and co-author of AWWA's Utility Cash Reserves.
ROLE: Alberto will serve as the Project Manager on this project with the
responsibility of managing the day-to-day execution and operations, leading the
execution of all aspects of the project, and achieving the agreed upon milestones
and deliverables.
Location: Black & Veatch Los Angeles office
PROPRIETARY AND CONFIDENTIAL INFORMATION
Bpi COM BLACK & VEATCH I QUALIFICATIONS AND EXPERIENCE OF PROPOSER'S PERSONNEL 4
Alberto Morales provides over 20 years of extensive water, wastewater, and recycled water ratemaking and
consulting experience for various public and special district agencies throughout California and across the nation.
He provides practical, proven, and cost-effective solutions when assisting agencies in developing their operating
and capital financing plans. In addition, his utility knowledge covers a wide range of utility management and
operating issues, including financial planning, cost of service and rate analysis, capital financing, capital
prioritizing, business case analysis, and technical due diligence.
Alberto has supported and led public outreach efforts for all his clients. He has developed and communicated to
staff and outside stakeholders about the purpose and value of developing long-term financial plans and
performing a cost -of -service analysis. In addition, he is well versed in Proposition 218 requirements affecting all
California municipal agencies.
ROLE: Rich will serve as a Technical Advisor on the cost -of -service analysis portion of
the project by providing insight on wastewater system operations.
Location: Black & Veatch Irvine office
Rich has almost 40 years of broad experience in water and wastewater engineering with expertise in treatment,
planning, design, and construction. He also has experience in process engineering, environmental chemistry, odor
control, and project management. Rich is very familiar with wastewater operations in Orange County. He has
been serving OC San since 1987 and has recently spent 8 years on -site as construction coordinator for P1-102 and
the GWRS Initial Expansion. He has also assisted Irvine Ranch Water District for over 10 years on their biosolids
and energy recovery facility.
Key Support Staff
The Project Team will be supported by a deep bench of experts in the subject areas critical to executing the City's
study. Specifically, we will use a team of financial analysts and engineers as junior staff in the analysis.
PROPRIETARY AND CONFIDENTIAL INFORMATION
BV CON! BLACK & VEATCH I QUALIFICATIONS AND EXPERIENCE OF PROPOSER'S PERSONNEL 5
Project Approach
PROJECT UNDERSTANDING
Like many utilities, the City of Newport Beach (City) is facing the challenge of balancing the needs of operating
and maintaining the water and wastewater systems while improving its infrastructure to deliver reliable and
affordable services to its customers in a fiscally responsible manner.
Located adjacent to the Pacific Ocean, the City has a service area of approximately 52.9 square miles at the
southern end of Orange County. The City provides water services to its residents through a complex network of
302 miles of water mains, 202-million-gallon (MG) storage capacity, 17 pump stations, 42 pressure reducing
stations, and 12 interconnections. In addition, the City provides wastewater services to its residents through a
complex network of gravity and forced sewer mains, lift stations, and sewer laterals.
In 2019, the City amended its water rates because it was operating at annual structural deficit, increase in capital
improvements expenditures dues to updated 2019 Water Master Plan, and increase water supply costs
associated with groundwater and purchasing. The last approved rate increase of the 2019 water rate study is
January 1, 2024. In 2022-23, the City has budgeted an increase in operating costs of about $170k and a 5-year
$21.7 million in capital projects between FY 2023 to FY 2028.
In 2018, the City amended its sewer rates because of increased operating costs and to actively replace aging
infrastructure. The last approved rate increase of the 2018 sewer rate study was January 1, 2022. The approved
increases accounted for an additional $1.5 million of revenue by FY 2022. In 2022-23, the City has budgeted an
increase in operating costs of about $1 million and a 5-year $4.7 million in capital projects between FY 2023 to FY
2028.
The City wishes to obtain a qualified consultant to conduct a Rate Study to determine if the current rates are
appropriate and to assist the City.
PROJECT METHODOLOGY AND EXECUTION HIGHLIGHTS
Multi -Faceted Integrated and Rigorous Methodology
In alignment with the study's objectives, Black & Veatch has defined a rigorous and integrated work structure, as
illustrated in Figure 1.
PROPRIETARY AND CONFIDENTIAL INFORMATION
BV COM BLACK & VEATCH I PROJFCT APPROACH 6
Financial Planning Cost of Service Analysis Rate Design
Project Allocate Review
Revenues Review Costs
!Develop Unit Develop Scenario__Pro-FormaCOS Rates Sc n ariProject ��its of gRevenue rvice
Requirements
Proposed
Distnbute
Planning A'Iocated Rates
Develop Costs Based
'--------------- p--- ----------=
Capital %Rev on Service Im lementation
Financing Plan Adjustments Requirements Support
How much money is needed? From whom should the money be collected? How should the services be priced?
Benefits toYouBenefits to You Benefits to You
An optimized Financial Plan that An equitable and defensible A schedule of proposed rates that
allows you to understand the approach to allocation costs are defensible, appropriately
impacts of Operating and Capital amongst all customer groups recovers costs and easy to
Requirements on Existing Rates. served by you. understand by stakeholders.
FIGURE 1 INTEGRATED METHODOLOGY
The key components of our
methodology consist of the
following:
■ Financial Planning. Rates and
charges should generate adequate
revenues to meet the operating and
capital costs and provide financial
stability. The analysis will be
conducted and modeled to provide
for scenario "what -if" assessment,
considering different assumptions
related to growth, revenue, and
expenses.
■ Cost of Service. The analysis will evaluate the existing utility and the relative load placed on the system by the
different customer classes to allocate costs based on services received fairly. The cost -of -service analysis will be
based on industry standards and methodologies prescribed by the American Water Works Association (AWWA)
Manual M1 and the Water Environment Federation's (WEF) Manual of Practice 27 (MoP 27). Our approach
combines engineering design considerations with operational realities to support defensible cost allocations.
■ Rate Design. Rates do more than just recover costs. Within the legal Proposition 218 framework and industry
standards, properly designed rates should support the City's objectives, such as revenue stability. Black &
Veatch will help develop rates and charges that are defensible and industry standard. The City will benefit from
our national experience with large, complex water and wastewater utilities and knowledge of creating and
implementing different rate designs.
SCOPE OF SERVICES
Task 1. Financial Plan
Black & Veatch will develop a five- and ten-year financial plan for the City's water and wastewater enterprises.
Specific subtasks include:
Development of Revenues
The development of revenues will be based on examining historical customer billings, financial reports, and
current operating budgets.
Customer, Usage, and Flow Projections
The City will provide accounts by meter size and consumption for a historical five-year planning period. We will
analyze historical and projected growth trends, climatological patterns, the potential for adding/losing major
utility customers, and changes in customer class usage patterns.
Revenue Projections
The existing revenue from rates will be determined by applying the current rates to projected accounts and
consumption. Revenue determined from this analysis will form the basis to assess revenues under existing rates
PROPRIETARY AND CONFIDENTIAL INFORMATION
BV COM BLACK & VEATCH I PROJECT APPROACH 7
for all customer classes over the period. The revenue projections are based on FY 2022 rates (the City implements
increases on January 1st of each year).
Miscellaneous Revenue
The revenues generated from other sources such as interest earnings and other miscellaneous revenues will be
incorporated and projected for the planning period. These revenue sources are important for determining the net
level of future revenues that need to be generated from rates.
Development of Revenue Requirements
The development of revenue requirements will be based on examining historical financial reports, current
operating budgets, proposed capital improvement programs, and long-term debt.
Project Operation and Maintenance Expense
Projections of 0&M expenses will be developed to facilitate analysis and cost allocations. O&M expenses will be
projected based on a review of historical financial records and trends and available budget estimates of future
0&M costs. Projections will recognize estimated increases in the number of accounts and consumption served as
well as the potential effects of continued inflation in costs levels for power, regulatory requirements, and other
O&M categories, the addition of new system facilities, any anticipated changes in operation and staffing, and
other factors which may influence future expense levels.
Capital Improvement Program Financing Plan
Financing plans for each utility's planned major
capital projects will be developed based on the
schedule and costs in the Capital Improvement
Program (CIP). The recommended CIP financing
strategy will be based on consideration of available
funding, loans, revenue bonds, and pay-as-you-go
financing. Depending upon the magnitude of the
CIP, additional debt financing may be indicated
during the study period to augment funds generated
by utility rates and other funding sources.
Debt Service Expense
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Projections of principal and interest payments on outstanding debt obligations and any projected future bonds or
state revolving fund loans for major capital improvements will be developed for the forecast study period. The
debt service on future bonds will reflect, as appropriate, the number of bond proceeds required for construction,
issuance costs, and compliance with any reserve requirements of the authorizing resolution.
Reserve Funding
Existing reserve fund requirements and balances will be reviewed for adequacy. Applicable bond ordinance
requirements, if any, will be reviewed along with any relevant utility policies. Based on a review of reserve funding
requirements, industry standards, and state regulations, adequate reserve levels will be recommended.
PROPRIETARY AND CONFIDENTIAL INFORMATION
B`i COti1 BLACK & VEATCH I PROJECT APPROACH 8
Cash Flow Analysis
Black & Veatch will prepare cash flow analyses
summarizing the above projections of revenues and
revenue requirements to determine the adequacy of
revenues under existing rate levels to meet operating
and capital needs for the five and ten-year study period
Forecasted revenue will include revenue under existing
rates for water and wastewater service, funds
generated from other operating income, and interest
income. Revenue requirements will include operation
and maintenance expenses, routine capital
OPERATING FUND
expenditures, the revenue financed portion of major
capital improvements, and any applicable debt service
costs or other anticipated obligations, as applicable. Adjustments will be made to allow any required revenue
increases to meet revenue requirements over the period and to minimize the impact of rate increases on the
City's customers to the extent possible.
Utilizing the scenario builder in our rate models, we will work with the City to prepare cash flow scenarios
reflecting changes in different assumptions such as customer consumption, operating expenses, capital
costs, and capital funding options. Each scenario will evaluate the ability of each system to fund revenue
requirements under the current rates and the level of future revenue adjustments needed to meet
obligations, including reserve requirements.
Task 2, Cost of Service Analysis
Black & Veatch will assign and allocate the revenue requirements to the different functional components using
AWWA and WEF principles. Specific subtasks include:
Annual Cost ofService
For the test year for which rates are to be designed, the cost of service to be met from rates and charges will be
determined from the revenue requirements identified in Task 1.
The cost -of -service estimates will then serve as the basis for developing cost of service rate schedules for the test
year. The net revenue requirements to be derived from rates for the test year will be developed on a cash
requirements basis.
Units ofService
Develop an estimate of the units of service associated with each cost causative element for water and wastewater
utility service. The units of service will be estimated based on the service characteristics defined for each
customer classification.
Units of service will be developed recognizing the accounts and consumption analysis, available data, and
engineering judgment about customer class service requirements. The service characteristics for each customer
class will be developed to match each system's functional cost causative elements.
PROPRIETARY AND CONFIDENTIAL INFORMATION
BV CONI BLACK & VEATCH I PROJECT APPROACH 9
Functional Cost Allocations
The test year costs of service will be allocated to the water and wastewater functional cost components. The
typical functional cost classifications include source of supply, pumping, treatment, transmission & distribution,
meters & services, and customer for water and collection and lift stations for wastewater.
Cost Ca usa tive Alloca tions
The cost of service for the test year will be allocated to the various cost causative components specific to the
water and wastewater services provided. The cost causative allocations will recognize base, extra -capacity,
customer and fire protection for water and volume, capacity, and customer costs for wastewater.
Alloca tion of Costs to Customer Classes
The cost allocation process will use unit costs of service applicable to all system users and class units of service to
determine proportional responsibility for total system costs allocable to each customer class. The relative
responsibility of each customer class will be determined based on the estimated service requirements for each
class utilizing the overall cash test year revenue requirements.
Determination of Revenue Adequacy
Black & Veatch will compare class revenues under existing rates with the allocated class costs of service to
determine the level of cost recovery by class and in total and demonstrate any needed adjustments to align class
revenues and allocated costs.
Task 3. Rate Design
Black & Veatch will consider the policies, pricing objectives, and practical limitations associated with designing
water and wastewater rates for the City when developing rate schedules. This task aims to develop fair and
equitable rates that are simple and easy to understand for existing customers.
The key activities include the following:
■ Based on the analysis completed herein, we will affirm the reasonable nexus between the cost incurred in
providing the service and the rates and charges developed to price the service.
Assess the applicability of the existing water and wastewater rates from a policy and operating perspective to
meet established rate -setting objectives.
Upon completing the cost -of -service analysis in Task 2, Black & Veatch will work with City staff to develop rates
that meet the goals and objectives identified. Specific subtasks include:
Water Rate Structures
Black & Veatch will examine existing and alternative water rate structure. Black & Veatch will update the existing
water rates which are currently based on a monthly meter charge by meter size and uniform consumption
charge. The existing water rates also include a fixed monthly meter charge for private fire protection and a fixed
monthly meter charge and consumption charge for recycled water customers.
For an alternative, Black & Veatch will provide a summary of different rate structures available for water. The
summary will provide a high-level description of different rate structures. Upon a review of the alternatives, Black
& Veatch will work with the City to incorporate into the study an alternative water rate structure if desired.
PROPRIETARY AND CONFIDENTIAL INFORMATION
BV.COfvl BLACK & VEATCH 1 PROJECT APPROACH 19
Exemption: Water budget -based rates is not considered an alternative in this scope of services due to data
intense nature.
Alternatives don't necessary require a change in structure but can be an addition to such as pass -through charges
for water purchases costs or drought surcharges for state -imposed water conservation.
Wastewater Rate Structures
Black & Veatch will examine the existing and an alternative wastewater rate structure. Black & Veatch will update
the existing wastewater rates which are currently based on a monthly meter charge by meter size and uniform
consumption charge.
It isn't expected that the wastewater rate structure will change, but Black & Veatch can assist the City with setting
up a new surcharge if desired. The surcharge can be tied to state -mandated water conservation in a similar
fashion as for the water utility.
Compare Typica/ Bills
Black & Veatch will perform typical bill comparisons for residential and non-residential customers to show the
potential impact of the recommended water and wastewater rates for the test year.
Benchmarking Analysis
Black & Veatch will obtain water and wastewater rates for five (5) neighboring agencies and calculate typical bills
to show how both the existing and proposed rates for the City compare to other local municipalities.
Task 4. Deliverables
Black & Veatch will provide the following deliverables to the City:
Reports
Black & Veatch will prepare draft comprehensive rate study reports. The reports will serve as administrative
record. The draft reports will document the findings and make recommendations for City water and wastewater
rates. The report will include at minimum the following sections:
■ Executive Summary
■ Financial Plan
■ Cost of Service Analysis
■ Rate Design
Black & Veatch will prepare final comprehensive rate study reports. The report will include all the sections in the
draft report and address any comments received from City staff and City Council. Black & Veatch will deliver
twenty-five copies along with an electronic PDF copy of the draft and final reports.
Black & Veatch will prepare a draft and final Proposition 218 public notice for the City. An electronic PDF copy of
the public noticed will be delivered to the City.
Meetings
Black & Veatch will participate in the following meetings:
■ One (1) one -hour kick-off meeting with City staff to review goals and objectives and establish responsibilities,
schedules, and milestones.
PROPRIETARY AND CONFIDENTIAL INFORMATION
BV COM BLACK & VEATCH I PROJECT APPROACH 11
Ten (10) two-hour progress meetings with City staff to discuss progress, key issues and preliminary results.
During these meetings, project schedule will be updated should there be a need. It is assumed that 5
meetings will be held virtually using Microsoft Teams or a similar platform and 5 in -person.
■ Ten (10) in person public meetings, including public workshops, to present study results and rate schedules
considered for adoption.
Rate Model
Black & Veatch's approach to developing financial and rate models is based on customizing our base model for
the City's unique characteristics, customers, the flow of funds, billing data, and financial planning goals and
objectives through proven calculation methodologies and industry principles.
The models will contain the following features:
■ Visually intuitive user interface and icon -based navigation throughout and between modules
■ Logical organization of information and data flow based on the required analyses
■ A consistent layout on each tab
■ Centralized data inputs and assumptions
■ Specifically tailored and designed to recognize the City's unique needs, characteristics, and information base,
including matching the City's budgetary and accounting structures.
■ Conduct "what -if" analyses reflecting the impact of changes in significant system variables such as revised
budgeted revenues and expenditures, changes in capital improvement program schedules, and policy
decisions.
Incorporation of user-friendly features, including fully automated preprogrammed print and navigation menus,
customized icons for specific model functions, and other features.
Dashboard: A dashboard system that allows users to create scenarios for financial planning and rate revenue
increases.
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PROPRIETARY AND CONFIDENTIAL INFORMATION
BV CONI
Quality Assurance/Quality Control
Procedures
WE ARE FIRMLY COMMITTED TO PROVIDING HIGH
QUALITY WORK THAT CREATES VALUE FOR THE CIT'/
AND ITS STAKEHOLDERS.
Black & Veatch maintains strict internal quality
control procedures on all engagements. These
procedures ensure that study tasks are properly
executed. Our process incorporates "lessons
learned" from the hundreds of water and
wastewater utility rate studies we have completed
nationwide.
Key features of our project management and quality
control approach include:
■ Define all roles and responsibilities and the
procedures for project communications among
the Black & Veatch team and the City staff.
■ Establish requirements for the format, delivery,
and approval of the study report and
presentation materials.
■ Align team member expertise and skills with
specific task needs detailed in the scope of work.
■ Adopt consistent QA/QC protocols to complete all
deliverables, affirm the quality of deliverables to
assure client satisfaction, and monitor all facets
of all engagements under this contract.
■ Engage in cohesive and coordinated task
execution and consistent collaboration with the
City staff involved in this rate study.
■ Maintain an "Issues Log" to effectively document
key issues, alternatives considered, and decisions
to have a well -documented assumption and
decision map.
PROPRIETARY AND CONFIDENTIAL INFORMATION
'B&V's established processes are built on our
100 years of quality management refinement.
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CONTINUOUS
IMPROVEMENTS
Client Communication
• Internal Audit
• Lessons Learned
BV CON!
Schedule and Schedule Control
SCHEDULE
Based on the Scope of Services, Black & Veatch prepared the following high-level preliminary schedule
based on receiving a written Notice to Proceed on or after November 2022. The schedule assumes that
the City will seek to implement its first rate adjustment on July 1, 2023. Should the City decide to delay
implementation to January 1, 2024, the schedule will be amended.
Should the schedule be extended for a January 1, 2024 implementation, it is anticipated that the period
between the completion of the analysis and the adoption of rates will be used for public outreach
associated with the 10 public meetings.
Again, this high-level schedule assumes timely receipt of requested data, a 2-week turn -around on
materials submitted for review, and access to City staff, City Council, and other stakeholders for meetings.
The schedule will be updated in more detail upon award and discussion with City staff regarding timing.
TASK DESCRIPTION NOV DEC ]AN FEB MAR .... JUN
Task 1: Financial Plan
Task 2: Cost of Service Analysis
Task 3: Rate Design
Task4: Deliverables '
x2 x2 x2 x2 x2 xg x2
' NTP/Kick-Off Meeting Progress Meeting f Draft Report ♦ Community/City Council Meeting . Final Report
SCHEDULE CONTROL
Black & Veatch has never missed a target implementation date regarding adopting rates for our California
clients. We succeed in this area because we work collaboratively with you to understand your needs and
incorporate slack into the project schedule as needed.
During our kickoff meeting, we will review the schedule with the City. Special consideration will be given
to understanding such administrative matters as (1) how many committees will review the proposed
rates, (2) how many readings and the timing of such readings for rate adaptation, and (3) City Council
dark periods. These matters will dictate when the completion date of the study and the scheduling of the
public meetings.
Black & Veatch will share the project schedule with the City so that all parties are aware of milestone
dates. The schedule above is indicative of how we believe the project will unfold. The timely receipt of
data does impact the project schedule. We will include a progress update concerning meeting milestones
as part of our monthly reporting.
PROPRIETARY AND CONFIDENTIAL INFORMATION
BV COiIM BLACK & VE.ATCH i 24
Reserve Policy Review (Optional Task)
Task 5. Reserve Policy Review
Black & Veatch will assist the City in reviewing the reserve policies in place for the Sewer Enterprise Fund
and recommend changes if needed.
Reserves are established for several reasons: covering shortfalls in operating revenues, maintaining
strong bond ratings, covering day-to-day operating costs, and easing the burden on ratepayers associated
with large rate increases. Typically, sewer utilities will maintain some of the following four reserves:
Operating Reserve represents working capital maintained by the Operating Fund to cover day-to-day
expenses and maintain enough funds to cover accounts receivables if there are supplier issues, periods of
lower -than -expected sewer sales, or unforeseen cost increases.
Construction Reserve represents funds used for unforeseen and unbudgeted capital costs.
Emergency Reserve represents funds used for unforeseen and unbudgeted capital costs.
Rate Stabilization Reserve represents funds used to absorb revenue shortfall due to short-term decreases
in sewer sales, especially when revenues depend on flow. This reserve stabilizes sewer rate revenue and
is an effort to avoid wide swings in rates charged to customers over time.
Appropriate reserve levels help sewer utilities liquidity, provide operational flexibility, and demonstrate
fiscal responsibility to the rating agencies, allowing the City to access lower -cost funds.
PROPRIETARY AND CONFIDENTIAL INFORMATION
6`v OJNI
BLACK Q VFATCH 1 21
EXHIBIT B
SCHEDULE OF BILLING RATES
Black & Veatch Management Consulting, LLC Page B-1
Pt " 11 111IMM
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REF
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F
COST PROPOSAL FOR NEWPORT BEACH
Professional Consulting Services:
2022 Sewer Rate Study
October 20, 2022
BLACK&VET
Cost Proposal
Based on the scope of services, Black & Veatch proposes to perform the work on a time -and -materials
basis for a not -to -exceed amount of $101,244 inclusive of anticipated direct expenses. Direct expenses
include but are not limited to mileage, car rental, hotels, meals, and reproduction costs. Table 1 below
provides a detailed breakdown of the hours and cost by task.
TABLE 1 PROJECT COSTS
DESCRIPTIONTASK
team Member
PROJECTPROJECT
•
Bui
•
Ten Bosch
Morales
Staff
• •
Hourly Billing Rate
$305
$280
$270
$180
Sewer Rate Study
Task 1: Financial Plan
2
8
36
80
$26,570
Task 2: Cost of Service Analysis
2
0
12
24
$8,050
Task 3: Rate Design
0
0
8
26
$6,710
Task 4: Deliverables
4
0
40
27
$16,745
Total Hours
8
8
96
157
$58,075
Direct Expenses (@5%)
$2,904
Total Fee
$60,979
Task 5: Reserve Policy Review
(Optional)
1
0
6
3
$2,450
Water Rate Study
Task 1: Financial Plan
2
4
18
60
$17,090
Task 2: Cost of Service Analysis
2
0
12
24
$8,050
Task 3: Rate Design
0
0
14
32
$9,380
Task 4: Deliverables
2
0
8
17
$5,745
Total Hours
6
4
52
133
$40,265
Direct Expenses (@5%)
$0
Total Fee
TotalGrand
$40,265
Key Assumptions:
In developing the cost proposal, it is important to understand that with regards to meetings, Black &
Veatch anticipates:
Ten (10) two-hour progress meetings with staff and public meetings. The proposal assumes 5
virtual meetings using Microsoft Team or similar platform and five (5) in -person. Based on our
experience, staff meetings can best be handled virtually as these tend to be for progress updates
and minor discussions. The other five (5) meetings will be in -person and reserved for meetings
with City Committees, City Council or public meetings. If the City wishes for 5 virtual meetings to
become in -person, please add an additional $250 per meeting.
PROPRIETARY AND CONFIDENTIAL INFORMATION
BV.COi1I BLACK & VEATCH I COST PROPOSAL 1
Ten (10) in -person public meetings including public workshops to present finding and assist in
Prop 218 public hearings. These meetings are separate from the previous 10 meetings.
ADDITIONAL SERVICES
Upon request and authorization by the City via an addendum to the agreement, any other related
services not identified in scope of services will be billed on an hourly basis according to the hourly rates
schedule in Table 2. Direct expenses are charged at direct out-of-pocket costs. Payment terms are net 30.
TABLE 2 BILLING RATES
*The rates shown on Table 2 for additional services are fixed through June 30, 2023 and are subject to increase
after July 1, 2023 to reflect annual salary increases.
PROPRIETARY AND CONFIDENTIAL INFORMATION
BV CONI BLACK & VEA_CH I COST PROPOSAL 2
EXHIBIT C
INSURANCE REQUIREMENTS — PROFESSIONAL SERVICES
1. Provision of Insurance. Without limiting Consultant's indemnification of City, and
prior to commencement of Work, Consultant shall obtain, provide and maintain at
its own expense during the term of this Agreement, policies of insurance of the
type and amounts described below and in a form satisfactory to City. Consultant
agrees to provide insurance in accordance with requirements set forth here. If
Consultant uses existing coverage to comply and that coverage does not meet
these requirements, Consultant agrees to amend, supplement or endorse the
existing coverage.
2. Acceptable Insurers. All insurance policies shall be issued by an insurance
company currently authorized by the Insurance Commissioner to transact
business of insurance in the State of California, with an assigned policyholders'
Rating of A- (or higher) and Financial Size Category Class VII (or larger) in
accordance with the latest edition of Best's Key Rating Guide, unless otherwise
approved by the City's Risk Manager.
3. Coverage Requirements.
A. Workers' Compensation Insurance. Consultant shall maintain Workers'
Compensation Insurance, statutory limits, and Employer's Liability
Insurance with limits of at least one million dollars ($1,000,000) each
accident for bodily injury by accident and each employee for bodily injury by
disease in accordance with the laws of the State of California, Section 3700
of the Labor Code.
Consultant shall submit to City, along with the certificate of insurance, a
Waiver of Subrogation endorsement in favor of City, its City Council, boards
and commissions, officers, agents, volunteers and employees.
B. General Liability Insurance. Consultant shall maintain commercial general
liability insurance, and if necessary umbrella liability insurance, with
coverage at least as broad as provided by Insurance Services Office form
CG 00 01, in an amount not less than one million dollars ($1,000,000) per
occurrence, two million dollars ($2,000,000) general aggregate. The policy
shall cover liability arising from premises, operations, personal and
advertising injury, and liability assumed under an insured contract (including
the tort liability of another assumed in a business contract).
C. Automobile Liability Insurance. Consultant shall maintain automobile
insurance at least as broad as Insurance Services Office form CA 00 01
covering bodily injury and property damage for all activities of Consultant
arising out of or in connection with Work to be performed under this
Agreement, including coverage for any owned, hired, non -owned or rented
vehicles, in an amount not less than one million dollars ($1,000,000)
combined single limit each accident.
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D. Professional Liability (Errors & Omissions) Insurance. Consultant shall
maintain professional liability insurance that covers the Services to be
performed in connection with this Agreement, in the minimum amount of
one million dollars ($1,000,000) per claim and two million dollars
($2,000,000) in the aggregate. Any policy inception date, continuity date,
or retroactive date must be before the Effective Date of this Agreement and
Consultant agrees to maintain continuous coverage through a period no
less than three years after completion of the Services required by this
Agreement.
4. Other Insurance Requirements. The policies are to contain, or be endorsed to
contain, the following provisions:
A. Waiver of Subrogation. All insurance coverage maintained or procured
pursuant to this Agreement shall be endorsed to waive subrogation against
City, its City Council, boards and commissions, officers, agents, volunteers
and employees or shall specifically allow Consultant or others providing
insurance evidence in compliance with these requirements to waive their
right of recovery prior to a loss. Consultant hereby waives its own right of
recovery against City, and shall require similar written express waivers from
each of its subconsultants.
B. Additional Insured Status. All liability policies including general liability,
excess liability, pollution liability, and automobile liability, if required, but not
including professional liability, shall provide or be endorsed to provide that
City, its City Council, boards and commissions, officers, agents, volunteers
and employees shall be included as insureds under such policies.
C. Primary and Non Contributory. All liability coverage shall apply on a primary
basis and shall not require contribution from any insurance or self-insurance
maintained by City.
D. Notice of Cancellation. All policies shall provide City with thirty (30)
calendar days' notice of cancellation (except for nonpayment for which ten
(10) calendar days' notice is required) or nonrenewal of coverage for each
required coverage.
5. Additional Agreements Between the Parties. The parties hereby agree to the
following:
A. Evidence of Insurance. Consultant shall provide certificates of insurance to
City as evidence of the insurance coverage required herein, along with a
waiver of subrogation endorsement for workers' compensation and other
endorsements as specified herein for each coverage. Insurance certificates
and endorsement must be approved by City's Risk Manager prior to
commencement of performance. Current certification of insurance shall be
kept on file with City at all times during the term of this Agreement. The
certificates and endorsements for each insurance policy shall be signed by
a person authorized by that insurer to bind coverage on its behalf. At least
Black & Veatch Management Consulting, LLC Page C-2
fifteen (15) days prior to the expiration of any such policy, evidence of
insurance showing that such insurance coverage has been renewed or
extended shall be filed with the City. If such coverage is cancelled or
reduced, Consultant shall, within ten (10) days after receipt of written notice
of such cancellation or reduction of coverage, file with the City evidence of
insurance showing that the required insurance has been reinstated or has
been provided through another insurance company or companies. City
reserves the right to require complete, certified copies of all required
insurance policies, at any time.
B. City's Right to Revise Requirements. City reserves the right at any time
during the term of the Agreement to change the amounts and types of
insurance required by giving Consultant sixty (60) calendar days' advance
written notice of such change. If such change results in substantial
additional cost to Consultant, City and Consultant may renegotiate
Consultant's compensation.
C. Right to Review Subcontracts. Consultant agrees that upon request, all
agreements with subcontractors or others with whom Consultant enters into
contracts with on behalf of City will be submitted to City for review. Failure
of City to request copies of such agreements will not impose any liability on
City, or its employees. Consultant shall require and verify that all
subcontractors maintain insurance meeting all the requirements stated
herein, and Consultant shall ensure that City is an additional insured on
insurance required from subcontractors. For CGL coverage,
subcontractors shall provide coverage with a format at least as broad as CG
20 38 04 13.
D. Enforcement of Agreement Provisions. Consultant acknowledges and
agrees that any actual or alleged failure on the part of City to inform
Consultant of non-compliance with any requirement imposes no additional
obligations on City nor does it waive any rights hereunder.
E. Requirements not Limiting. Requirements of specific coverage features or
limits contained in this Section are not intended as a limitation on coverage,
limits or other requirements, or a waiver of any coverage normally provided
by any insurance. Specific reference to a given coverage feature is for
purposes of clarification only as it pertains to a given issue and is not
intended by any party or insured to be all inclusive, or to the exclusion of
other coverage, or a waiver of any type. If the Consultant maintains higher
limits than the minimums shown above, the City requires and shall be
entitled to coverage for higher limits maintained by the Consultant. Any
available insurance proceeds in excess of the specified minimum limits of
insurance and coverage shall be available to the City.
F. Self -insured Retentions. Any self -insured retentions must be declared to
and approved by City. City reserves the right to require that self -insured
retentions be eliminated, lowered, or replaced by a deductible. Self -
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insurance will not be considered to comply with these requirements unless
approved by City.
G. City Remedies for Non -Compliance. If Consultant or any subconsultant fails
to provide and maintain insurance as required herein, then City shall have
the right but not the obligation, to purchase such insurance, to terminate this
Agreement, or to suspend Consultant's right to proceed until proper
evidence of insurance is provided. Any amounts paid by City shall, at City's
sole option, be deducted from amounts payable to Consultant or reimbursed
by Consultant upon demand.
H. Timely Notice of Claims. Consultant shall give City prompt and timely notice
of claims made or suits instituted that arise out of or result from Consultant's
performance under this Agreement, and that involve or may involve
coverage under any of the required liability policies. City assumes no
obligation or liability by such notice, but has the right (but not the duty) to
monitor the handling of any such claim or claims if they are likely to involve
City.
Consultant's Insurance. Consultant shall also procure and maintain, at its
own cost and expense, any additional kinds of insurance, which in its own
judgment may be necessary for its proper protection and prosecution of the
Work.
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December 20, 2022
City of Newport Beach
Insurance Compliance
PO Box 100085 - FV
Duluth, GA 30096
Black & Veatch Management Consulting LLC
11401 Lamar Avenue
Overland Park, KS 66211
Reference Number: FV00000854
This Account has moved from non -compliant to COMPLIANT status and currently in compliance for
certificate of insurance requirements.
As of the date above, your insurance meets City of Newport Beach insurance requirements. We appreciate your efforts
and those of your insurance agent in working with our insurance representatives.
Please call us at (951) 766-2285 if you have any questions.
Sincerely,
City of Newport Beach
Compliant Notice [CA1]