HomeMy WebLinkAboutC-5107 - Agreement for Participation in Water Budget Based Tiered Rate Grant ProgramCity of Newport Beach
Agreement for Participation in Water Budget
Based Tiered Rate Grant Program
11 -03 -2011
Agreement for Participation in Water Budget
Based Tiered Rate Grant Program
THIS AGREEMENT ( "Agreement'), dated this / " day ofr�L
2012, is made between the Municipal Water District of Orange County ( MWDOC) and
the City of Newport Beach, a California Municipal Corporation and Charter City ( "City" or
"Party" herein) for the purpose of ensuring participation and local match funding under a
grant program for developing and implementing water budget based tiered rate
structures. The City will be participating in the program along with other cities and water
agencies served by MWDOC ("Participants" herein).
Recitals
WHEREAS, the State of California is experiencing a water supply crisis due to a
variety of factors, including naturally occurring drought conditions and judicial orders for
decreased water deliveries to Southern California from the State Water Project; and
WHEREAS, water conservation in the form of budget based tiered rates is a
proven method of water conservation and an important additional conservation measure
that should be considered by all water providers, and
WHEREAS, the investment in technology and manpower required to develop and
implement a water budget based tiered rate structure is significant, and pooling the
resources of numerous cities and agencies will enhance efficiency and allow economies
of scale; and
WHEREAS, MWDOC and a number of its retail agency customers submitted a
Grant Proposal to the California Department of Water Resources proposing to examine
the costs, issues and water savings associated with implementation of Budget Based
Tiered Rates for Water Management and Droughts (Grant Study); and
WHEREAS, the California Department of Water Resources approved the Grant
Study proposal and awarded $685,000 in grant funds (DWR Grant) to MWDOC to cover
a substantial portion of an overall program with an estimated total cost of $2,390,695;
and
WHEREAS, the City is a MWDOC retail customer that has agreed to participate
in the Grant Study; and
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City of Newport Beach
Agreement for Participation in Water Budget
Based Tiered Rate Grant Program
11 -03 -2011
WHEREAS, MWDOC has already entered into an agreement with DWR
(attached hereto as Attachment A and incorporated herein by reference) that
establishes the rights and obligations of MWDOC and any Participants under the DWR
Grant, including reports and local match requirements; and
WHEREAS, MWDOC and the City further require the Agreement set forth herein
in order to ensure compliance with the DWR Grant, establish a scope of work for the
Grant Study, set a schedule, outline their respective rights and obligations, and
establish cost allocation principles for how the Grant funding will be shared among the
Participants; and
WHEREAS, certain elements of the Grant Study require the assistance of an
outside consultant, Red Oak which shall be retained by MWDOC or the individual
Participants, as provided herein.
NOW THEREFORE, MWDOC and the City agree as follows:
1. PROJECT OVERVIEW
The purpose of the Grant Study is to assist a number of MWDOC's retail water
agencies in examining various aspects of water budget rate structures, including the
feasibility, approach and implementation of water budget rate structures. The Grant
Study will be conducted in three phases, although not every Participant will participate
in every phase. The phases are:
Phase 1: Water Rate Development
Phase 2: Use of Parcel Data for Water Budget Development
Phase 3: Billing and Accounting System Needs (hardware and software)
As Grantee under the DWR Grant, MWDOC will work with the Participants in a
group setting from time to time to discuss elements of all three phases. In addition,
separate meetings between MWDOC and the individual Participants will focus in greater
detail on the policy and technical issues associated with water budgets. Individual
Participant meetings will be held with the appropriate policy- makers and senior staff to
receive input on the type of water budget best suited for each Participant. In addition, a
billing system compatibility analysis will be conducted and different implementation
options will be provided for each Participant in that phase of the study.
The Grant Study will also outline the financial and political aspects of water
budgets and will position the retail agencies to implement water budgets for equitable
allocation of water under a continuing rationing scenario. The main goal of the Grant
Study is to help urban communities cope with water shortages and drought conditions,
but the water management benefits of a water budget based rate structure will continue
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City of Newport Beach
Agreement for Participation in Water Budget
Based Tiered Rate Grant Program
11 -03 -2011
to accrue each and every year. Equitable allocation of indoor and outdoor water needs
by account will allow the Participants to determine quickly and accurately which
accounts are over their allotment. Based on this information, a water purveyor can
focus its resources on saving water from these accounts based on price and /or other
complementary device -based conservation programs. In this manner, the flexibility of
water budgets makes them the most equitable mechanism for water conservation.
Agencies with sewer rates based on water consumption will also benefit by the
reduction in treatment costs. All legal issues, including compliance with the California
Environmental Quality Act (CEQA), will be handled by the individual Participants
through their own legal counsel. Legal costs so incurred can be used as local matching
funds. MWDOC has taken the position that for purposes of the Grant Study, no action
by MWDOC is required for CEQA compliance. An independent CEQA determination
should be made by each Participant pursuant to advice from its legal counsel.
2. CONSULTING CONTRACTS (PHASES 1 AND 3)
To secure the required expertise and assistance in rate making, rate modeling
and implementation of budget based tiered rates, the Participants and MWDOC
conducted a selection and due diligence process to identify consultants to be hired by
MWDOC. This process included (1) collecting information about qualifications of
potential consultants from Participants, (2) working with Participants to identify and
complete due diligence to establish qualifications for potential consultants, (3) MWDOC
soliciting Statements of Qualifications from a number of consultants and selecting the
consultants to be hired directly by MWDOC, and (4) Participants reviewing and hiring
consultants based on their own administrative procedures. At all times MWDOC
advised the Participants that they were free to utilize consultants selected by
Participants or others with whom Participants have already worked on related activities.
This multi - pronged process to establish and evaluate qualifications resulted in a
consensus for MWDOC to hire Raftelis Financial Consultants for the Phase 1 Water
Rate Development and Red Oak Consulting for Phase 3 Billing and Accounting System
Needs. This process included input from Participants who were already working with
Raftelis and Red Oak on related activities.
Pursuant to these efforts, the Participants directed MWDOC to enter into
agreements with both Raftelis Financial Consultants and Red Oak Consulting, a division
of Malcolm Pirnie, to make consulting services available in support of the Grant Study.
Shown below is a table indicating which agencies will be hiring their own consultants
and which ones will be utilizing the MWDOC retained consultants.
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City of Newport Beach
Agreement for Participation in Water Budget
Based Tiered Rate Grant Program
11 -03 -2011
use of Consultants for DWR
Budget Based Tiered Water Rates
Phase 2
Phase 3
Digital
Phase 1 Rate
IT Hardware
Participant
Mapping
Structure
Software
1. Garden Grove
Yes
2. Buena Park
Own*
Own*
3. Yorba Linda WD
Raftelis
Own*
4. South Coast WD
Yes
Raftelis
Own*
5. El Toro WD
Yes
Raftelis
Own*
RedOakvia
6. Huntington Beach
Raftelis
MWDOC
7. Moulton Niguel
Yes
RedOak
Own*
S. SMWD
Yes
RedOakvia
9. Newport Beach
MWDOC
10. San Juan Capistrano
Yes
11. East Orange County WD
Yes
Raftelis
Own*
12. Mesa Consolidated WD
Yes
13. Fountain Valley
Own*
Raftelis for
Management
14. MWDOC
of Grant
hired by
MWDOC
* "Own" indicates the Participant will retain its own consultant
The Grant Study approved by DWR requires completion of ten (10) tasks, as
described more fully in Section 4 below. Each task requires certain activities by
MWDOC as the Grantee and certain activities by one or more of the Participants,
depending on which of them are participating in a particular task.
For completion of the Study Tasks, MWDOC's responsibilities include:
a. Management and administration of consulting service proposal with Raftelis
Financial Consultants (attached hereto as Attachment B and incorporated
herein by reference).
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City of Newport Beach
Agreement for Participation in Water Budget
Based Tiered Rate Grant Program
11 -03 -2011
Management, facilitation and administration of the Grant Study process with
the Participants, including the tracking, monitoring and reporting of in -kind
contributions.
c. Invoicing the Participants, pursuant to this and other agreements, and paying
the consultants hired by MWDOC.
d. Administration of the DWR Grant agreement (attached hereto as Attachment
A and incorporated herein by reference), including tracking local contributions
toward the local match amount and working with the Participants to ensure to
the fullest extent possible that all DWR funds are utilized.
For completion of the Study Tasks, the City's responsibilities include:
a. Participate and cooperate with MWDOC, other Grant Study Participants and
all consultants hired for the Grant Study, including by responding to
information requests on a timely basis.
b. Attendance at workshop meetings.
c. Assigning staff to attend individual meetings with Grant Study consultants.
d. Keeping accurate and complete records of in -kind contributions to submit for
credit toward the Participant's local match amount, which can include direct
payments for services related to any aspect of the Grant Study, the value of
staff time expended in furtherance of the Grant Study, legal fees and costs
incurred in connection with participation in the Grant Study, and other fees
and costs for consultants hired in connection with participation in the Grant
Study, if any.
e. Taking all reasonable steps available to maximize all local match
opportunities so that the full amount of the grant from DWR can be utilized.
The Participants are collectively responsible for providing an overall local
contribution of 71 % of the full cost of the Grant Study. The Party hereby
acknowledges that if the local contribution falls below 71 % of the full cost of
the Grant Study, DWR will reduce its contribution so as to maintain a 29%
share and funds otherwise available under the DWR Grant will not be
available for the Grant Study. MWDOC will work with the Participants,
individually and collectively, to ensure that all DWR funds are utilized to the
maximum extent possible.
f. The City contracted with Red Oak Consulting (Attachment C) in December
2009, thereby satisfying Task 6 below -- assessing Billing and Accounting
System Needs. This contract was in the amount of $88,177.00. MWDOC and
the City anticipate that the MWDOC Grant will reimburse the City $34,000.00
for this portion of the work. In fulfillment of this requirement, the City will be
responsible for providing a short summary of the project objectives, findings
and outcomes.
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City of Newport Beach
Agreement for Participation in Water Budget
Based Tiered Rate Grant Program
11 -03 -2011
3. DIGITAL MAP PRODUCTS (DMP) CONTRACT (PHASE 2)
The City of Newport Beach elects to opt out of Phase 2. The City will provide its own
digital mapping.
4. TEN TASKS OF THE GRANT STUDY
The ten tasks required by the Grant Study are standard tasks based on the
American Water Works Association Rates and Charges Manual, which is the industry
standard for water rate setting.
Task 1: General Administration and Report Preparation for All Agencies.
Task 1 includes general administration and coordination among the Participants and
consultants; quarterly progress report preparation and invoicing are included, as is a
joint agency kickoff meeting to be held at the commencement of the Grant Study.
MWDOC staff will be facilitating and managing the Grant Study on behalf of all of the
Participants.
Task 2: Identify Cost and Agency Revenue Requirements
Task 2 involves identification of annual cash requirements to pay for the associated
costs of maintaining water agency operations, while still meeting debt coverage ratio
and reserve requirements. Each Participant in the Water Rate Development process will
complete this task on their own.
Task 3: Cost of Service Analysis
MWDOC will conduct a workshop with the Participants in the Water Rate Development
Process to provide information and background on how to conduct a cost of service
analysis. Individual Participants will develop details on customer classes and fixed
versus variable costs
Task 4: Develop Rate Structure and Water Budgets
Another workshop will be held with the Participants in the Water Rate Development
Process to discuss Rate Structures and Water Budgets, including the following three
topics or subtasks:
a. Policy Factors for Indoor / Outdoor Allocation — Develop policy options
associated with indoor and outdoor water allocations. These policy options
will serve as the foundation for developing water budgets.
b. Development of Water Budget Database — Based on the policy option
developed in the above task, each retail agency will develop the appropriate
allocation factor for each account. MWDOC will utilize Newport Beach
mapping estimates of irrigable area for each parcel. These estimates will be
developed based on calculations and parcel data from the Assessor's Office
and infrared map overlays that will identify estimated irrigation areas for each
City of Newport Beach
Agreement for Participation in Water Budget
Based Tiered Rate Grant Program
11 -03 -2011
parcel. This information will be incorporated into a water budget database
that will allow formulation of a monthly water budget for each parcel.
c. Model Development and Testing — Utilizing the water budget database as
one of the model drivers, each agency will develop a water budget model to
populate with data for their agency. The water budget models will provide
Participants with an ability to conduct "what if' scenarios. The models will
perform: 1) fixed /variable rate adjustment, 2) water budget allocation, 3)
revenue analysis, and 4) typical monthly bills comparisons.
Task 5: Legal Input — Proposition 218 Compliance
The City shall have its own attorney provide input and advice on water budget based
rates and compliance with provisions of Proposition 218. The indemnification of
MWDOC and the State set forth below in this Agreement expressly includes, without
limitation, any administrative or legal action related to Proposition 218.
Task 6: Billing and Accounting System Needs and Options
To support the implementation of the water budget based rate structure, the Phase 3
work will include an assessment of current customer service and billing practices and a
review of the information systems used for Customer Information and Billing purposes.
The ability of the current system will be compared with new requirements for handling
budget based tiered rates and a gap analysis report will be prepared. This report will
make recommendations for either a change in procedures or a change in systems and
will provide suggested tasks, a schedule and an estimate of costs. Implementation of
any billing or information system changes will be the responsibility of the City.
Task 7: Outreach
MWDOC and the Participants will develop generalized information templates for use by
Participant's moving into implementation. Each individual Participant will then develop
specific outreach materials and a tailored approach for its own use. The main goal of
this task is to educate the public on the benefits associated with water budgets and how
they function.
Task 8: Implementation of Budget Based Tiered Rates
MWDOC and its consultants hired as provided herein will be available to attend Board
of Directors or City Council meetings and will develop presentation templates outlining
options for generalized customer support. Individual Participants are responsible for all
implementation phases and customer support within their service areas.
Task 9: Final Report
MWDOC, with the assistance of its consultants and each Participant, will develop
individual reports that summarize the activities, findings and conclusions for each
Participant. These reports will discuss the individual budget allocation used and the
expected savings to be achieved. An overall report summarizing the results will be
prepared for submittal to DWR and will be available to the Participants.
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City of Newport Beach
Agreement for Participation in Water Budget
Based Tiered Rate Grant Program
11 -03 -2011
Task 10: Monitoring and Evaluation
After the completion and submittal of the final report, MWDOC and each Participant will
be responsible for conducting annual monitoring and evaluation reports to determine
actual savings from this project. MWDOC will summarize the analysis for DWR.
5. SCHEDULE
The general schedule for the Grant Study is outlined below. Based on the State
freezing and restarting the grant, DWR will allow MWDOC and the Participants to go
back to October 14, 2008 to capture matching costs expended after that date. The
Digital Mapping effort began in October 2009. The DWR Contract, including the one -
year extension, extends through May 15, 2012. Following is the estimated task
schedule, assuming a start date of March 15, 2010:
[INTENTIONALLY LEFT BLANK]
0
Budget Based 'Tiered Rate Grant Schedule
Work
Phase
Code*
Item
Timing
IT
1. Workshop on IT, Billing, Software
March 15, 2010
DM
2. Delivery of 2009 Digital Mapping Data
March 15, 2010
DM
3. Training on LandVision by Digital Maps
March — April
2010
WR
4. Workshop on Water Rate Structures
May 2010
(estimated)
IT
5. Workshop with Potential Software Vendors (may be
combined with other activities)
May /June
(estimated)
6. Finalize Agreements with Agencies & Consultants (Notice
to Proceed)
June, 2010
(estimated)
PR
7. First Progress Report to DWR
July 2010
IT
8. Complete Initial Assessment on IT, Billing, Software
September 2010
PR
9. Second Progress Report to DWR
October 2010
IT
10. Initiate Detailed IT, Billing, Software —where required
November 2010
WR
11. Complete Primary Work on Water Rate Structures
January 2011
PR
12. Third Progress Report to DWR
January 2011
PR
13. Fourth Progress Report to DWR
April 2011
IT
14. Complete detailed IT, Billing, Software —where required
July 2011
WR
15. Agencies moving to implementation - complete and
implement all work on Rate Structures
January 2012
PR
16. Fifth Progress Report to DWR
July 2011
17. Complete all work with Agencies on all Phases
January 2012
PR
18. Sixth Progress Report to DWR
October 2011
PR
19. Final Progress Report to DWR
January 2012
20. Begin Five Year Monitoring Program
January 2012
21. DWR Agreement End Date
May 2012
* Work Phase Code:
IT = IT, Billing, Software activities
DM = Digital Mapping activities
WR = Water Rate Structure activities
PR = Progress reporting activities
X61
6. DELIVERABLES
MWDOC will submit the quarterly reports to DWR documenting progress, task
completion, and project success, the "Draft Final Report" due at Agreement end date,
the "Final Report" due approximately one month following the Agreement end date, and
"Annual Updates on Benefits & Costs" for 5 consecutive years following completion of
the Grant Study. The projected benefits will be validated through data analysis.
In addition to the deliverables required by DWR, MWDOC will also submit to
DWR the "Rate Structure Recommendations Reports" and 'Billing and Accounting
System Needs and Options Reports' (one each per participating agency).
7. PHASES OF PROJECT PARTICIPATION
The Participants will participate in their choice of a three Phase Grant Study and will
receive a share of the grant funds based on their participation in the chosen Phase as
outlined in Attachment D and incorporated herein by this reference.
8. GRANT SHARING
Attachment A provides the basis for sharing in the grant funds from DWR. The
conditions for receipt of Grant Funds by the Participants includes:
o Must provide 71 % local funds or in -kind services to receive up to 29%
grant funds, up to max in Attachment D.
o Grant funds shown in Attachment D cannot be exceeded unless other
Participants do not use all of the grant funds they were allocated.
o Participants may utilize excess matching funds from other Participants
toward their own local match, if the funds are available for that purpose.
9. OUTREACH, COMMUNITY INVOLVEMENT, AND ACCEPTANCE
Outreach and community involvement activities (see Task 7) are an important
component of the Grant Study, especially for any Participant proceeding into full
implementation of budget based tiered rates. Outreach will begin when needed by an
agency and extend through adoption and implementation of the rate structure.
The Participants and their consultants shall include appropriate
acknowledgement of credit to the State of California, Department of Water Resources
and to all cost - sharing partners for their support when promoting the Grant Study or
using any data and /or information developed under the Agreement.
10
10.BUDGET
The total cost for the Grant Study is $2,390,695. The total DWR Grant amount
awarded is $685,000, subject to Participants' local matching share of $1,705,695, or
71 % of the total amount. Refer to section 2f for the City of Newport Beach anticipated
reimbursement amount.
11. COST SHARING
Attachment D provides the basis for sharing in the grant funds from DWR.
MWDOC will monitor and track the level of expenditures for each Participant. The goal
is to complete the work with the highest quality and lowest cost possible and with a
percentage local match of 71 % or greater.
12.INVOICING
For other consultants hired by MWDOC, invoices shall be sent to the agencies
on a quarterly basis concurrently with MWDOC's quarterly invoices to the State.
Payments for consultants hired directly by the City are the responsibility of the City.
Reports on payments made directly by the City for costs incurred for staffing and other
internal costs shall be submitted to MWDOC on a quarterly basis.
13. INDEMNIFICATION AND HOLD HARMLESS
a. General: Each Party agrees to indemnify, defend at its own expense,
including attomeys' fees, and hold each other Party harmless from and
against all claims, costs, penalties, causes of action, demands, losses and
liability of any nature whatsoever, including but not limited to liability for bodily
injury, sickness, disease or death, property damage (including loss of use) or
violation of law, caused by or arising out of or related to any negligent act,
error or omission, or willful misconduct of that indemnifying Party, its officers
or employees, or any other agent acting pursuant to its control in the
performance of this Agreement.
b. As to MWDOC: Each Participant agrees to indemnify and defend at its own
expense, including attorneys' fees, and hold MWDOC harmless from and
against all claims, costs, penalties, causes of action, demands, losses and
liability of any nature whatsoever related to an administrative or legal
challenge to such Participant's action, or inaction, with respect to a water
budget based rate structure.
c. As to State: MWDOC and each Participant agrees to indemnify the State
and its officers, agents, and employees against and to hold the same free and
harmless from any and all claims, demands, damages, losses, costs,
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expenses, or liability due or incident to, either in whole or in part, and whether
directly or indirectly, arising out of the Grant Study.
14. INSPECTIONS BY STATE
The State of California, acting by and through the Department of Water
Resources, shall have the right to inspect the work being performed by the Participants
at any and all reasonable times during the term of the Agreement. This right was
established as to MWDOC in the DWR Grant agreement, and by express requirement it
must be extended by MWDOC to this Agreement and all Participants.
15.WORKERS' COMPENSATION CLAUSE
Each Participant affirms that it is aware of the provisions of Section 3700 of the
California Labor Code, which require every employer to be insured against liability for
workers' compensation or to undertake self- insurance in accordance with the provisions
of that code, and each Participant affirms that it will comply with such provisions before
commencing the performance of the work under this Agreement and will make its
contractors and subcontractors aware of this provision.
16.AMERICANS WITH DISABILITIES ACT
By signing this Agreement, each Participant affirms that it complies with the
Americans with Disabilities Act (ADA) of 1990, (42 U.S.C. 12101 et seq.), which
prohibits discrimination on the basis of disability, as well as all applicable regulations
and guidelines issued pursuant to the ADA.
17. DRUG -FREE WORKPLACE CERTIFICATION OF COMPLIANCE
By signing this Agreement, each Participant certifies that it has a drug -free
workplace program that meets the requirements of Government Code 8350 et seq. with
respect to employees who may work directly in the expenditure of grant funds. )
MWDOC's Drug and Alcohol Free Workplace Program is attached as
Attachment E and incorporated herein by reference, and MWDOC shall implement its
program as required in connection with administration of the DWR Grant.
I
18. NON DISCRIMNATION CLAUSE
During the performance of this Agreement, the Participants shall not deny the
Agreement's benefits to any person on the basis of religion, color, ethnic group
identification, sex, age, physical or mental disability, nor shall they discriminate
unlawfully against any employee or applicant for employment because of race, religion,
color, national origin, ancestry, physical handicap, mental disability, medical condition,
marital status, age, or sex. The Participants shall insure that the evaluation and
treatment of employees and applicants for employment are free of such discrimination.
The Participants shall comply with the provisions of the Fair Employment and
Housing Act (Government Code, Section 12900 et seq.), the regulations promulgated
thereunder (California Code of Regulations, Title 2, Section 7285.0 et seq.), the
provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code
(Government Code, Sections 11135 - 11139.5) and the regulations or standards adopted
by DWR to implement such article.
The Participants shall give written notice of their obligations under this clause to
labor organizations with which they have a collective bargaining or other agreement.
The Participants shall include the nondiscrimination and compliance provisions of
this clause in all contracts and subcontracts to perform work under the Agreement.
The Participants' signatures on this Agreement shall constitute a certification that
each signing Participant has, unless exempted, complied with the nondiscrimination
program requirements of Government Code, Section 12990, and Title 2, California
Code of Regulations, Section 8103.
19.TERM
Unless terminated earlier as provided in this section, the term of this Agreement
shall run concurrently with the term of the agreement between MWDOC and DWR,
which extends through May 15, 2012. Alternatively, this Agreement runs until
completion and payment of all costs of all Phases of the Project or until termination of
the DWR Contract, whichever occurs earlier, unless the Agreement is terminated earlier
by a majority of the Participants pursuant to Section 26 below. This Agreement may be
modified by written agreement of MWDOC and the City, including modification to extend
the term to be made consistent with any extensions provided by DWR for its contract.
Pursuant to the DWR Grant agreement, the Project is considered to be completed or
terminated for purposes of the DWR Grant only when so determined by DWR.
20. NOTICE
Any notice, invoice, payment made pursuant to this Agreement shall be sent to
MWDOC and the City at the address shown below.
193
City of Newport Beach
City of Newport Beach
P.O. Box 1768
Newport Beach, CA 92663
ATTN: Dave Kiff, City Manager
MWDOC
Municipal Water District of Orange County
18700 Ward St.
P.O. Box 20895
Fountain Valley, CA 92728
ATTN: Kevin P. Hunt
MWDOC and the City may change their addresses for this purpose by giving
written notice to the other as provided herein.
21.TIMELINESS
Time is of the essence in this Agreement.
22.AMENDMENTS
The Agreement may be amended at any time by mutual agreement of all parties
set forth in a written instrument and executed by all MWDOC and the City.
21ASSIGNMENT
No party may assign or otherwise assign or transfer any rights, interests or
obligations under this Agreement without the written consent of all parties. Once an
assignment or transfer occurs with such consent, this Agreement and all of its
provisions shall apply to and bind the successors and assigns of the parties.
24. SEVERABILITY
The partial or total invalidity of one or more provisions of this Agreement will not
invalidate the remaining provisions.
25.GOVERNING LAW
This Agreement is governed by and shall be interpreted in accordance with the
laws of the State of California. Venue for any action filed by any party or parties related
to this Agreement shall be Orange County, California.
26.TERMINATION OF AGREEMENT
This Agreement may be terminated by MWDOC or the City by action of their
respective governing boards or councils. Upon termination, each shall remain
14
responsible for its share of costs up to the time of termination, as well as reasonable
close-out costs, if any.
27. COUNTERPARTS
This Agreement and any amendment hereto may be executed in two or more
counterparts, and by each party on a separate counterpart, each of which, when
executed and delivered, shall be an original and all of which together shall constitute
one instrument, with the same force and effect as though all signatures appeared on a
single document.
28. SIGNATURES
The individuals executing this Agreement represent and warrant that they have
the legal capacity and authority to do so on behalf of their respective agencies.
IN WITNESS WHEREOF, the MWDOC and the City have executed this Agreement as
of the date below.
Date
Date �i/���
By
By
Kevin P. Hunt
City of Newpo , Beach
General Manager
Nancy Gardn
MWDOC
Mayor `
Approved as to Form:
Approved as to Form:
Date A i 9' -r 2-
Date
By: �
E 3 y:
Aaron Harp
Russell G. Behrens
Daniel J. Payne
City Attorney
General Counsel
Attest:
Dateell
By
"
e ni . Brown
City Clerk
15
Attachment A = DWR Grant Contract
Attachment B = Raftelis Financial Consultants Proposal for MWDOC
Attachment C = Red Oak Consulting Proposals for Newport Beach
Attachment D = Grant Sharing Summary
Attachment E = MWDOC Drug and Alcohol Free Workplace Program
16
Attachment A
DWR Grant Contract
ilv/
STATE OF CALIFORNIA -THE RESOURCES AGENCY ARNOLD SCHWA RZENEGGER,GovemoT
DEPARTMENT OF WATER RESOURCES
1416 NINTH. STREET, P.O. BOX 942836
SACRAMENTO, CA 942360001'
(9161 6535791
00 =10 amn
October 5, 2009
600Z6 0 130
03AI3038
Mr. Kevin P. Hunt
General Manager
Municipal Water District of Orange County
18700 Ward Street
Fountain Valley, California 92708
Dear Mr. Hunt:
Enclosed is your fully executed copy of Proposition 50 Water Use Efficiency Drought
Grant Agreement 4600008312 for the Budget Based Rates in Orange County for Water
Management and Droughts Project. Please use your letterhead when you send
invoices to the Department of Water Resources. Also, make reference to the
agreement number, to whom the check should be made payable, and where it should
be mailed.
If you have any questions regarding the processing of your invoices, please contact me.
Sincerely,
i
Lisa tiste
Grants Coordinator
(916) 651 -7039
Enclosures
P „
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
STATE OF CALIFORNIA
THE RESOURCES AGENCY
DEPARTMENT OF WATER RESOURCES
AGREEMENT BETWEEN THE STATE OF CALIFORNIA
DEPARTMENT OF WATER. RESOURCES
AND
MUNICIPAL WATER DISTRICT OF ORANGE COUNTY
FOR URBAN DROUGHT ASSISTANCE GRANT UNDER
PROPOSITION 50; THE WATER SECURITY, CLEAN DRINKING WATER,
COASTAL AND BEACH PROTECTION ACT OF 2002
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates. in Orange County
for Water Management and Droughts
Drought Grant
This agreement is entered into between the State of California, acting by and through
the Department of Water Resources, (State) and the Municipal Water District of Orange
County, (Grantee).
The State and Grantee agree as follows:
SECTION •1 PURPOSE OF GRANT
This State Grant is made by the State to the Grantee to assist in financing a Water
Conservation Project pursuant.to the California Proposition 50, the Water Security,
Clean Drinking Water, Coastal and Beach-Protection Act of.2002. This Grant program
implements Water Code Chapter 7, Section 79550(g) of Proposition 50.
Grant funds may be used only as.provided in this Agreement for such Eligible Project
Costs' as set forth in the Project description' and Budget, copies of which are
incorporated herein as reference. Exhibit B, "Statement of Work' and Exhibit C,
"Budget" which describe tasks to be accomplished and costs associated with those
tasks under this Agreement
SECTION 2 TERM OF STATE GRANT
The term of this Agreement shall be for two years from the date of execution.
SECTION 3 PROJECT COSTS
The Total Project Costs (identified in Exhibit C) are estimated to be $2,390,695.00.
SECTION 4 STATE GRANT
Subject to the availability of funds, the State will grant to the Grantee in accordance with
the terms of this Agreement an amount not to exceed $685,000.00, as State Share, as
identified in Exhibit C, for Eligible Project Costs.
SECTION 5 GRANTEE'S COST SHARE AMOUNT
The Grantee agrees to fund the difference,. if any, between the estimated'Project Cost
(Section 3) and the State Grant (Section 4). Grantee's Costs are estimated to be
$1,705,695.00, as identified in Exhibit C.
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Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
SECTION 6 INCORPORATION OF STANDARD CONDITIONS AND GRANTEE
'COMMITMENTS
In addition to Exhibits B and C, this agreement incorporates Exhibit A, "Standard
Terms'. The Grantee accepts and. agrees to comply with all terms, provisions,
conditions, and commitments of this Agreement, including all incorporated documents,
and to full all assurances, declarations, representations and statements made by the
Grantee in the Application, documents, amendments and communications filed in
support of its request for financing.
SECTION 7 CONDITIONS FOR DISBURSEMENT
The Grantee shall meet all conditions for disbursement of money under this Agreement,
.including the provisions of Exhibit A-6. Failure by Grantee to comply may, at the option
of the State, result in termination of the Agreement:
SECTION 8 PROGRESS REPORTS AND STATEMENT OF-COSTS
The Grantee shall submit quarterly progress reports, starting 3 months after date of
execution, o� as detailed in the Exhibit B; B7 "Schedule of Progress Reports and
Payments° on the status of the Project and a Statement of Costs to the Department of
Water Resources. The submittal and approval by the- State of these reports is a
requirement for continued disbursement of State Grant funds. Progress reports shall
summarize' the work completed during the reporting period, include a statement of
progress. toward' completion compared to the Project schedule, and provide" a
comparison of costs to date compared to the approved scope of work and Project
budget. Quarterly Reports will follow the format requirements set forth in Exhibit B;
Attachment 1.
SECTION 9 FINAL REPORTS
The Grantee shall submit a Draft.Finat Report on Project completion or termination and
.expenditures for the State's review and comment. , The Draft Final. Report shall be
modified to incorporate the State's comments, if any, and resubmitted, as-Firial Report
within sixty (60) days of the Grantee's receipt of the State's comments. The Grantee
shall also submit Post - Completion Annual Reports and updates. Reporting will follow
the format requirements set in Exhibit B, Attachments 2 and 3.
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
SECTION 10 OPERATIONS AND MAINTENANCE OF "CONSTRUCTION" PROJECT
In consideration of the State Grant, the Grantee agrees, for the useful life of the Project
to expeditiously commence and to continue operation of the Project and shall cause the
Project to be operated in an efficient and economical manner; shall provide for all
repairs, renewals, and replacements necessary to the efficient operation. of the Project;
and shall cause the Project to be maintained in as good and efficient condition as upon
its construction, ordinary and reasonable wear and depreciation excepted. Refusal of
the Grantee to operate and maintain the Project in accordance with this provision may,
at the option of the State, be considered a material breach of Agreement and may be
treated as default under default provisions Exhibit.A -25.
SECTION 11 RELATIONSHIPS OF PARTIES
The Grantee, its contractors, subcontractors, and their respective agents and
employees required for performing any' work under this Agreement shall act in an.
independent capacity and not as officers, employees, or agents of the State.
The Grantee is solely responsible-.for planning and implementation of the Project.
Review or approval of plans, specifications, bid documents or other construction
documents by the State is solely'for the purpose of proper administration of State Grant
funds and shall not be deemed to relieve or restrict the Grantee's responsibility.
SECTION 12 PERMITS, LICENSES, APPROVALS AND LEGAL OBLIGATIONS
The Grantee shall be responsible-for obtaining any and all permits, licenses and
approvals required for performing any work under this Agreement, including .those
necessary for planning and implementing the Project. The Grantee shall be responsible
for complying with all applicable federal, State and local laws, rules or regulations
affecting any such work; specifically including, but not limited to, environmental', labor,
procurement and safety laws, rules, regulations and ordinances:
SECTION 13 GRANTEE'S RESPONSIBILITIES FOR WORK
The Grantee shall be responsible for work. and for persons or entities engaged in work,
including, but not limited to, subcontractors, suppliers and providers of services. The
Grantee shall give persbnal supervision to any work required under this Agreement or
employ a competent representative, satisfactory to the State, with the authority to act for
the Grantee. The Grantee or its authorized representative shall be present while work
is in progress: The Grantee shall be responsible for any and 'all disputes arising out of
its contracts for. work on' the Project, including but not limited to bid disputes and
payment disputes with the-Grantee's contractors and subcontractors. The State will not
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
mediate disputes between the Grantee and any other entity concerning responsibility for
performance of work.
SECTION 14 PROJECT OFFICIALS AND NOTICES
The Chief, Office of Water Use Efficiency and Transfers, Department of Water'
Resources shall be the State's representative and shall have the authority to sign
Agreement and amendments to'the Agreement if needed, and to make determinations
with respect to each controversy or discrepancy arising under or in connection with the
interpretation, performance; or payment for work performed under this Agreement. .
The Grantee Project Director shall be Kevin P. Hunt. The Grantee Project Director shall
be the Grantee's representative for the administration of the Agreement and shall have
full authority to act on behalf of the Grantee, including authority to execute all payment
requests. All communications given to the Project .Director shall be as binding as. if
given to the Grantee.
Either party may change its representative upon written notice to the other party.
Notices required to be given to the State in writing by the Grantee under this Agreement
shall'be sent to:
Baryohay Davidbff, Manager
Water Use Efficiency Grant Program
State of California
Department of Water Resources
Office of Water Use Efficiency and Transfers
901 P Street, Room 313A
Post "Office Box 942836
Sacramento, CA 94236 -0001
Notices required to be given- to the Grantee in writing by the State under ttiis Agreement
shall be sent to:
Kevin P. Hunt, General Manager.
Municipal Water District of Orange County
P.-O. Box 20895
Fountain Valley, CA 92728
A change of address for delivery or notice may be made by either party by written notice
of such"change. of address to the other party.
All such notices shall be enclosed in a properly addressed, postage prepaid• envelope
and deposited in a.United States Post Office for delivery by registered or certified mail.
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
Approved as to Legal Form and Sufficiency:
By � IT� .
David A. Sandino, Chief Counsel Da e
Department of Water Resources
STATE OF CALIFORNIA
DEPARTMENT OF WAT
MUNICIPAL WATER DISTRICT OF ORANGE
COUNTY
Approved as to Legal Form and Sufficiency:
By
Grantee's Attorney (if applicable) Date
By
Signa ry *ate�7
Kevin P. Hunt;.General Manager
Municipal Water District of Orange County
18700 Ward Street
Fountain Valley, CA 92708
Use Efficiency and Transfers
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
o
Date
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Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
STATE OF CALIFORNIA
THE RESOURCES AGENCY
DEPARTMENT OF WATER RESOURCES
EXHIBIT A
STANDARD TERIViS
A -1. GOVERNING LAW: This Agreement is governed by and shall be interpreted in
accordance with the laws of the State of California.
A -2. TIMELINESS: Time is of the essence in this Agreement.
A 73. AMENDMENT: This Agreement may be amended at any time by mutual
agreement .of the parties, except insofar as any proposed amendments are in
any way contrary to applicable law. Requests by the Grantee for amendments
must be in writing stating.the amendment request and the reason for the request.
A -4. SUCCESSORS AND ASSIGNS: This Agreement and all of its provisions shall
apply to and bind the successors and assigns . of the parties hereto,. No
assignment or transfer of this Agreement or any part thereof, rights hereunder, or
interest• herein by the Giantee.shall be valid unless. and until it is approved by the
State and made subject to such reasonable terms and conditions as the State
may imposer
A -5. ELIGIBLE PROJECT COSTS: Grantee, shall apply State Grant funds received
only to Eligible Project Costs, as identified in Exhibit C.
A-6. CONDITIONS FOR DISBURSEMENT: The State shall have no obligation to
disburse money under this Agreement unless and until the Grantee has satisfied
the State that the disbursement is in accordance with the requirements of the
Water Code Chapter (7), Section 79550(g) of Proposition 50, and the following:
(a) For Construction Projects, .the Grantee submits to the State, final plans
and specifications certified by a California Registered Civff Engineer or
equivalent documentation as to compliance with the approved Project.
(b) The Grantee submits a written statement by an authorized representative
that it has obtained all necessary pen-nits, easements, rights -of -way and
approvals as may be required by other State, federal, and /or local
agencies, as specified in Section 12 of this Agreement.
Agreement 4600008312
Municipal. Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
(c) The Grantee demonstrates compliance with the California Environmental
Quality Act and the National Environmental Policy Act by submitting
copies of any environmental documents, including environmental impact
reports, environmental impact statements, negative declarations,
mitigation agreements, legal notices and environmental permits as may be
required prior to beginning the Project.
(d) The Grantee submits timely quarterly progress reports, draft final and final
reports, and post - completion annual reports on benefits and costs updates
as required by Sections 8 and 9 of this Agreement.
(e) The Grantee demonstrates continuing availability of sufficient. funds to
complete the Project.
A -7. STATE GRANT DISBURSEMENTS:
(a) Cost Statements: After the Conditions for Disbursement, Section A-6, are
met, the State will disburse the whole or portions of the State Grant
commitment to- the Grantee following' receipt from the Grantee of a
statement or statements of incurred Eligible Project Costs, reviewed by
the Grantee's designated representative, and timely progress reports as
required by Section 8 of this Agreement. Requests for State Grant funds
.shall be filed quarterly or for such periods as the State and the Grantee'
may mutually agree. The Grantee shall provide the following information:
1. A statement of the incurred . Eligible Project Costs for work
performed under the Agreement during the period identified in the
particular statement and which matches the Budget in Exhibit C
and tasks' in Exhibit B.
2. A statement of the cost of any interests in real property (land or
easements) that have been necessarily acquired for the Project
during the period identified in the. particular statement for the
implementation of the Project.
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Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
The Grantee shall submit two (2) copies of quarterly progress
reports and (2) copies of invoice.(along with supporting documents
for expenditures) associated with work accomplished during that
quarter to:
Baryohay Davidoff, Water Use Efficiency Grant Program Manager
Department of Water Resources
Office of Water Use Efficiency and Transfers
901 P Street, Room 313A
P,O. Box 942836
Sacramento, CA 94236 -0001
The invoice must' be .detailed and provide supporting
documentation for both State and Local Share of costs for each
quarterly progress report. Invoice shall be submitted in 'arrears,
bearing the Agreement number:
The Grantee must also submit one (1) original copy of each invoice
simultaneously to: I I -
DWR Accounting Office
Contracts Payable Unit
P.O. Box 942836
Sacramento, CA 94236
All reports and invoices must be on the Grantee's letterhead, have
name, project title, Agreement number, invoice number, and the
quarter and tasks for which progress reports and invoices cover.
(b) Disbursement: Following the review and approval of each invoice, the
State will disburse to the Grantee the amount approved, subject to the
availability of funds through the State's normal procedures. Furids will be
disbursed by the State in response to each approved invoice on a pro rata
basis in accordance with the relative payment obligations of the Grantee.,
Sections 3, 4, and 5 of this Agreement. Any and all money disbursed to.
the Grantee, under this Agreement and any and all interest -earned by the
Grantee on such money shall be used solely to pay Eligible Project Costs.
Agreement 460000.8312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
Along with submittal of Draft and Final Report and satisfactory. completion
of the project. Grantee shall submit to the State a final invoice for incurred
Eligible Project Costs and request release of retention/withiholding, as
identified to Exhibit A -8(a) of this agreement-
A -8. ' WITHHOLDING OF GRANT DISBURSEMENTS BY STATE:
(a) Withholding. Clause: The State, at its discretion, may withhold ten percent
(10 %) of the funds requested by the Grantee for reimbursement of eligible
Project Costs until the Project is completed and Final Report is received.
(b). Additional Conditions for Withholding: If the State determines that the
Project is not being completed substantially in accordance with the
provisions of this Agreement or that the Grantee has failed in any other
respect to comply substantially with. the provisions-of this Agreement, and
if the Grantee does not remedy any such failure.to the State's satisfaction,
the State may withhold from the Grantee all or any portion of the State
Grant commitment and take any other action that it deems necessary to
protect its interests.
(c) Withholding Entire State Grant Commitment: If the State notifies the
Grantee of its decision to withhold all of the State Grant commitment from
the Grantee pursuant to Subdivision (b) of this Article, this Agreement
shall terminate upon receipt of. such notice by the Grantee and shall no
longer be binding on either party.
(d) Withholding Balance of State Grant Commitment: Where a portion of the
State Grant commitment has been disbursed to the Grantee and the State
notifies-the Grantee of its derision to withhold the balance of the State
Grant, the portion that has been disbursed shall thereafter be repaid
immediately with interest, as directed by the State_. Refusal of the Grantee
to so repay may, at the option of the State, be considered a material
breach of Agreement and- may be treated as default under Default
Provisions, Exhibit 25.
A -9. .DOCUMENTATION OF PROJECT BENEFITS AND COSTS: Actual Water
Savings and Other Benefits and Costs: The Grantee shall submit Annual
Reports of Benefits and Costs after the first operational year has elapsed and
report any updates and other benefits such as water savings, water quality, flow
and timing, energy.savings, and any other /additional benefits and costs resulting
frorn..the Project, as detailed in the Exhibit B (B -2, Benefits). These reports must
be submitted on schedule as identified in Exhibit B (B -7, Schedule for Progress
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Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
Reports and Payments) to the Project Manager. If appropriate, the Grantee shall
revise the estimate of water savings based on records of each consecutive year
for five years. Estimates shall include total annual water savings, net annual
water savings, and costs..The report shall also include a description of how the
water produced by the Project is being utilized. This recording and reporting
process shall be subsequently repeated for a total of five (5) consecutive
operational years.
A -10, TIMING AND MANNER OF PROJECT UNDERTAKING:
(a) Project Undertaking Pursuant to Agreement: The Project shall be
undertaken in strict accordance with this Agreement.
(b) Determination of Protect Completion: For the purposes. of this Agreement,
the Project shall be considered to be.completed.or to be terminated when
so determined by the State.
(c) Acknowledgement of Credit: The ' Grantee shall include appropriate
acknowledgement of credit to the State and to all cost= sharing partners for
their support when promoting the Project or using any data and /or
information developed'under the Agreement. .
(d) Audit Requirement: Pursuant to Government Code Section 8546.7, the
contracting parties'shall be subject to the examination and audit of the
State for a .period of three l (3) years after final payment under this
Agreement with respect to all matters connected with the performance of
this Agreement, including but not limited to; the cost of administering this
Agreement All records of the Grantee or subcontractors shall be
preserved for this purpose for at least three (3) years after completion of
the Project.
(e) Competitive Bidding of Contracts and Procurements: Grantee shall
comply with all applicable laws and regulations regarding securing
competitive bids and undertaking competitive negotiations in Grantee's
contracts with other entities for acquisition of goods, and services and
construction of public works with funds provided by the State under this
Agreement.
(f) Final Inspection and Certification of Registered Civil Engineer
(Construction Proiects): Upon completion of the Project the Grantee shall
provide for a final -inspection and certification by a California Registered
Civil Engineer that the Project has been completed in accordance with
submitted final plans and specifications and any modifications thereto and
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Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
in accordance with this Agreement. The Grantee shall notify the Office of
Water Use Efficiency and Transfers of the Department of Water
Resources of the inspection date at least 10 days prior to the inspection in
order to provide the. State the opportunity to participate in the inspection.
A -11. ACCOUNTING AND DEPOSIT OF GRANT DISBURSEMENT:
(a) Separate Accounting of State Grant Disbursements and Interest Records:
The Grantee shall account for'-the money disbursed pursuant to this
Agreement separately from all other Grantee's funds. The Grantee shall
maintain audit and accounting procedures that are in accordance with
generally accepted accounting principles and practices, 'consistently
applied. The Grantee shall keep complete and accurate records of all
receipts, disbursements, and interest earned on expenditures. of such
funds. The' Grantee shall require its contractors or subcontractors to
maintain books, records, and other documents pertinent to their work in
accordance with generally accepted accounting principles and practices.
Records 'are subject to inspection by the State at.any and all reasonable
times.. .
(b) Disposition of Money Disbursed: All money disbursed pursuant to this
Agreement shall. be. deposited, administered, and accounted for pursuant
to the provisions of applicable law.
(c) Remittance of Unexpended Funds: The Grantee, within a period of thirty
(30) days from the final disbursement from the State to the Grantee of
State Grant funds, shall remit to the State any unexpended funds that
were disbursed-to the Grantee under this Agreement and were not needed
to pay Eligible Project Costs.
(d) Interim and Final Audits: The State reserves the right to conduct an audit
at any time between the execution of this Agreement and the completion
of the Project, with the costs of such audit borne. by the State. After
completion of the Project, the State may require the Grantee'to conduct a
final audit, qt the Grantee's expense, such audit to be conducted by and a
report prepared by an independent-Certified Public Accountant.
Failure or refusal by the Grantee to comply with this provision: shall be
considered a substantial failure to comply with this Agreement, and the.
State may elect to pursue any remedies provided in Article A -25 or take
any other action it deems necessary to protect its interests.
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Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
A -12. CLAIMS DISPUTE CLAUSE: Any claim that the Grantee may have regarding
the performance of this 'agreement including, but not limited to, claims for
additional compensation or extension of time, shall be submitted to .the Project
Manager, Department of Water Resources, within thirty (30) days of the
Grantee's knowledge of the claim. Project Manager and Grantee shall then
attempt to' negotiate a resolution of such claim and process an amendment to
this Agreement to implement the terms of any such resolution.
A =13. REMEDIES NOT EXCLUSIVE: The use by either party of any remedy specified
herein for the enforcement of this agreement is not exclusive and shall not
deprive the party using such remedy of, ' or limit the application of any other
remedy. provided by law.
A -14. STATE TO BE HELD HARMLESS: The Grantee agrees to indemnify the State
and its officers, agents, and employees against and to hold the same free and.
harmless from any and all 'claims; demands, damages, losses, costs, expenses,
or liability due or incident to, either in whole or in park .and whether directly or
indirectly, arising out of.the Project
A -15. INSPECTION OF BOOKS, RECORDS, AND REPORTS: ' During regular office
hours, each of the parties hereto "and their duly authorized representatives shall
have the right to inspect and'to make copies of any books, records, or reports of
either party pertainirig to this Agreement-or matters related hereto. Each of the
parties hereto shall maintain and shall make available at all times for such
inspection accurate records of all its costs, disbursements, and receipts with
respect to its activities under this Agreement. Failure or refusal by the Grantee to
comply with this provision shall be considered a substantial failure to comply with
this Agreement and the State may withhold disbursements to the Grantee.or take
any other action it deems necessary to protect its interests.
A -16. INSPECTIONS OF PROJECT BY STATE: The State shall have the right to
inspect the work being performed at any and all reasonable times during the term
of the Agreement. This right shall extend to any subcontracts, and the Grantee
shall include provisions ensuring such. access in all its contracts or subcontracts
entered into pursuant to its Agreement with the State. .
A -17. PROHIBITION AGAINST DISPOSAL OF PROPERTY WITHOUT STATE
PERMISSION: The Grantee shall not sell, abandon',. lease, transfer, exchange,
mortgage, hypothecate, or encumber in any manner whatsoever all or any
portion of any real or other property necessarily connected or used in conjunction
with the Project, without prior permission of the State. The Grantee shall not take
any action, including but not limited to actions relating to user fees, charges, and
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Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
assessments that could adversely affect the ability of the Grantee to meet its
obligations under this Agreement, without prior written permission.of the State.
The State may require that the proceeds from the disposition of.any real or
personal property be remitted to the State to be applied to the Grantee's
indebtedness under this Agreement..
A -18. NO THIRD PARTY RIGHTS: The parties to this Agreement do not intend to
create rights in, or grant remedies to, any third party as a beneficiary of this
Agreement; or of any duty, covenant, obligation or undertaking established
herein.
A -19. NOTICES: All notices that are required either expressly or by implications to be
given by one party to the other under this-Agreement shall be signed for the
Program Manager and for the Grantee by such officers, as from time to time, it
may authorize in writing to so act. All such notices shall be deemed to have
been given if delivered personally or if enclosed in a properly addressed
postage- prepaid envelope and deposited in a United States Post Office for
delivery by registered or.certified mail.
A -20. PERFORMANCE AND ASSURANCES: Grantee agrees to faithfully and
expeditiously perform or cause to be performed all Project work as described in
the final plans and specifications as.submitted or as later amended and approved
by the State under this Agreement and to apply State funds received only to
Eligible Project'Costs.and to operate and maintain the Project in accordance with
applicable provisions of the law. In the event the State finds .it necessary to
enforce this provision or any right or power under this Agreement in the manner
provided by law, Grahtee agrees to. pay all costs incurred by the State including,
but not limited to, reasonable attomeys' fees, legal expenses, and costs. The
State reserves the right to seek further written.assurances from the grantee that
the work of.the Project under this Agreement will be performed consistent with
the terns of this Agreement.
A -21. SEVERABILITY: In the event that any provision of this Agreement is
unenforceable or held to be unenforceable, then the parties agree -that all other
provisions of this Agreement have force and effect and shall not be affected
thereby.
A -22. WAIVER ' OF RIGHTS: None of the provisions of this. Agreement shall be
deemed waived unless expressly waived in writing. It is the intention of the
parties hereto that from time to time either party may waive any of its rights under
this Agreement unless. contrary td law.' Any waiver by either party hereto of rights
arising in connection with this Agreement shall not be deemed to be a waiver
with respect to any other rights or matters, and such provisions shall continue in
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Agreement 4600008312
Municipal Water District of.Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
full force and effect:
A -23. TERMINATION WITHOUT CAUSE: ' The State may terminate this Agreement
without cause on 30 days advance written notice. The Grantee shall be
reimbursed for all reasonable.expenses incurred up to the date of termination.
A -24. TERMINATION FOR CAUSE:. The State may terminate.this Agreement and be
relieved .of any payments should the Grantee fail to perform the requirements of
this Agreement at the time and in the manner herein provided including but not
limited to reasons of default under A -25.
A -25. TERMINATION BY GRANTEE: Grantee may terminate this Agreement and be
relieved of contractual obligations. In doing so, Grantee must provide a
reason(s) for termination. Grantee must submit all progress reports summarizing
accomplishments up until termination date.
A -26. DEFAULT PROVISIONS:
(a) The grantee will be in default under this agreement if any of the following
occur:
1: Substantial 'breach of this Agreement, or any 'supplement or
amendmentto it;
2. Making any false. warranty, representation, or statement with
respect to this Agreement;
.3. Failure to make any remittance required by this Agreement.
(b) Should an event of default occur, the State may do any or all of the
following:
1. Demand the State Grant be immediately -repaid, with interest, which
shall be equal to the State of California general obligation bond
interest rate in effect at the time of the default;
2. Terminate any. obligation to make future payments to the Grantee;
3. Terminate the Agreement; and
4. Take any other action -that it deems necessary to protect its
interests.
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Agreement 4600008312
Municipal Water. District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
(c) . The Grantee agrees that any remedy provided in this Agreement is in
addition to and not in derogation of any other legal or equitable remedy
available to the State as a result of a breach of this Agreement by the
Grantee, whether such breach occurs before or after completion of the
Project.
(d) No waiver by the State of. any breach or default will be a waiver of any
breach or default occurring later. A waiver will be valid only if signed by
the State or its authorized agent.
A -27. CONFLICT OF INTEREST_
(a) Current State Employees:
1. No State officer or .employee shall engage in any employment,
activity-or enterprise from which the officer or employee receives
compensation or has a financial interest and which is sponsored or
funded by any State agency, unless the employment, activity- or
enterprise is required as a condition of regular State employment..
2. No State officer or employee shall contract on his or her oven behalf
'as an independent contractor with any State agency to provide
goods or services.
(b) Former State Employees:
1. For the two year period from the date he or she left State
employment, no former State officer or employee may enter into a
contract in which he or she engaged in any of the negotiations,.
transactions, planning, arrangements or any part of the. decision-
making process relevant to the Agreement while employed in any
capacfty.by any State agency.
2. For the twelve -month period from the date he or she left State
employment, no former State officer or employee may enter into,a
contract with any State agency if he.or she was employed by that
State agency in a policy- making position in the same general
subject area as the proposed'Agreement within the twelve -month
period prior to his or her leaving State service.
A -28. WORKERS' COMPENSATION CLAUSE: The Grantee affirms that.it is aware of
the provisions of Section 3700 of the California Labor Code, which require every
employer to be insured against liability for workers' compensation or to undertake .
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Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought.Grant
self- insurance in accordance with the provisions of that code, and the Grantee
affirms that it will comply with such provisions before commencing the
performance of the work under this Agreement and will make its contractors and
subcontractors aware of this provision.
A -29. AMERICANS WITH DISABILITIES ACT: By signing this Agreement, Grantee
assures the State that it complies with the Americans with Disabilities Act (ADA)
of 1990, (42 U.S.C. 12101 et seq.), which prohibits discrimination on the basis of
disability, as well as all applicable. regulations and guidelines issued pursuant to
the ADA.
A -30. DRUG -FREE WORKPLACE CERTIFICATION:
(a) Certification of- Compliance
By signing this Agreement, the Grantee, its contractors or subcontractors
hereby certify under penalty of perjury under the laws of the State of
California compliance with the requirements of the Drug -Free Workplace
Act of 1990 (Government Code_8350 et seq.) and have or will provide a
drug- free.workpiace by taking the following actions: .
1. Publish a statement notifying employees, contractors and
subcontractors that , unlawful manufacture, distribution;
dispensation, possession, or use of a controlled substance is
prohibited and specifying actions to be taken against employees,
contractors or subcontractors for violations, as required by
Government Code Section 8355(a).
2. Establish a Drug -Free Awareness Program, as required by.
Government - Code Section 8355(b) to inform employees,
contractors and subcontractors about all of the following:
a. The dangers of drug abuse. in the workplace,
b. The Grantee's policy of maintaining a drug -free workplace,
c. Any available counseling, rehabilitation and employee
assistance programs, and
d. Penalties that may be imposed upon employees, contractors
or subcontractors for drug abuse-violations.
17
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant,
3. Provide, as required by Government Code Section 8355(c), that
every employee, contractor and subcontractor who works under
this Agreement:
a. Will receive a copy of the .Grantee's drug -free policy
statement, and
b. Will agree to abide by terms of the Grantee's condition of
employment, contract or subcontract
(b) Suspension of Payments
This Agreement or State Grant may be subject to suspension of payments
or termination, or both, and the Grantee may. be subject to debarment if
the De partment.determines #hat: .
The Grantee, its contractors or subcontractors have made a false
certification, or;
2. Grantee, its contractors or subcontractors violates the certification
by failing to carry out the requirements noted above.
A -31. NON DISCRIMNATION CLAUSE: During -the performance of this Agreement,
the Grantee, its_ contractors and subcontractors shall not deny the Contract's
benefits to any person on the basis of religion, color,. ethnic group identification,
sex, age, physical or mental disability, nor shall they discriminate unlawfully
against any employee or applicant for employment because of race, religion,
color,. national origin, ancestry, physical handicap, mental disability, medical
condition, marital status, age, or sex. The Grantee shall ' insure that the
evaluation and treatment of employees and applicants for employment are free of
such discrimination.
The Grantee, its contractors and subcontractors shall comply with the provisions
of the Fair Employment and Housing Act (Government Code, Section 12900 et
seq.), the regulations. promulgated thereunder (California Code of Regulations,
Title 2, Section 7285.0 et seq.), the provisions of Article 9:5, Chapter 1, Part 1,
Division 3, Titfe 2 of the Government Code ( Govemment Code, Sections
11135 - 111.39.5) and the regulations or standards adopted by the awarding State
Agency to implement such article.
The Grantee, its contractors and subcontractors shall give written notice of their
obligations under this clause to labor organizations with which they have a
collective bargaining or other agreement.
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management'and Droughts
Drought Grant
The Grantee shall include the nondiscrimination and compliance provisions of
this clause in all contracts and subcontracts to perform work under the
Agreement.
The Grantee's signature on this Agreement shall constitute a certification under
the penalty of perjury under the laws of the State of California that the Grantee
has, unless exempted, complied. with the nondiscrimination program
requirements of Government Code, Section 12990, and Title 2, California Code .
of Regulations, Section 8103.'
A -32. UNION ORGANIZING: No State funds disbursed by this State Grant will be used
to assist, promote, or deter union organizing. If Grantee makes expenditures to
assist, promote, or deter union organizing, Grantee will maintain records
sufficient to show that no State funds were used for those expenditures and that
Grantee shall provide those records to the Attomey General.upon request.
19•
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
IyiRilei�
STATEMENT OF WORK .
MUNICIPAL WATER DISTRICT OF ORANGE COUNTY, 14542
B -1 Project Goals and Objectives
The proposed project involves coordinated work among 11 retail water agencies with a
'combined population of over a million people and annual water-sales of 230;000.acre
feet within Municipal Water District of Orange County (Grantee) to save water via
implementation of budget based rates. It is expected that at least 4 of the retail
agencies will proceed into the implementation phase. Agencies not going to full
implementation still benefit by having the background information and tools necessary
for implementation at a later date. Water budgets can assist during drought conditions
by sending price signals to customers who are the least efficient with their water use.
An integral part of this effort is the evaluation assessment of each individual agency's
billing system with a. water budget rate structure.
8 -2 Project Description
Due to the deteriorating water supply situation in California, the Orange County Grand
Jury in May 2008 recommended that each retail water agency in.Orange County
consider a water budget based rate structures to encourage conservation, address
equity concerns and increase revenue stability. Challenges agencies'face with water
budget rate structures are determining staff and billing system requirements, designing
defensible water budget allocations based on scientific data, gathering. public support
and setting realistic conservation goals. These challenges are often compounded by
lack of technical expertise and policy inexperience. This project proposes to assist the
agencies in overcoming these obstacles.
The purpose of the project'is to concurrently assist 11 retail water agencies in
examining the approach and implementation of water budget rate structures or various
aspects of water budget'rate structures. Grantee will conduct workshops with the full
group and then conduct detailed work with each agency on the policy and technical
issue associated with water budgets. Individual agency meetings will be held with the
appropriate policy makers and senior staff to receive input on what type of water budget
is best suited for each agency. In addition, a billing system compatibility analysis will be
conducted and different implementation options will be provided. By channeling the
energy of 11 local communities to examine water budgets, the political environment and
the likelihood of success will be improved.
PH
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange. County
for Water Management and Droughts
Drought Grant
With the potential for Metropolitan Water District of Southern California (MWD) to
declare mandatory water rationing in early 2009, this effort will position the retail.
agencies to enable implementation of water budgets for equitable allocation of water
during rationing. The main project goal is to help urban communities cope with water
shortages and drought conditions, but the water management benefits continue to
accrue each and every year. Equitable allocation of indoor and outdoor water needs by
account allows agencies to scientifically determine which accounts are over their
allotment. Water agencies can focus resources on saving water from non - efficient
accounts. Utilization of water budgets makes them the most equitable mechanism for
water. conservation. Agencies with sewer rates based on water consumption can
accrue additional benefits. Due to the nature of this project, CEQA action is not
required. All legal actions will be handled by the implementing agencies.
Grantee has designed the following 10 tasks to produce a proactive plan. The steps
proposed for water budget based rates are based on the American Water Works
Association, Rates and Charge Manual, the industry standard for water rate setting.
Task 1 Administration
Task includes general administration and coordination. among the 11 retail agencies and
_consultants; quarterly progress'teport preparation and invoicing; and a joint agency
kickoff meeting to be held -at the beginning of the project. Grantee staff will be
facilitating and managing the program on behalf of all of the participating retail agencies.
Task 2 Identify Cost and Agency Revenue Requirements
Task 2 involves the identification of the annual cash requirements to pay for the
associated costs of maintaining water agency operations, while meeting its debt
coverage ratio and reserve requirements. Red Oak Will hold a workshop on how to
conduct this analysis. • .
Task 3 Cost of Service Analysis
Grantee and Red Oak will hold a workshop which will educate the retail agencies on
how to conduct a cost of service analysis. The individual agencies will develop details
on customer classes and fixed versus variable costs.
Task 4 Develop Rate Structure and Water Budgets
The workshops discussed under Tasks 2 and 3 may be.part of a larger workshop on
Rate Structures and Water Budgets. In addition, Grantee and Red Oak will conduct the
following three subtasks:
21
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
.Drought Grant
Policy Factors for IndoodOutdoor Allocation — Grantee and Red Oak will hold a series of
workshops and meetings.to develop policy options associated with indoor and outdoor
water. allocation. 'These policy options will serve as the foundatiori for developing water
budgets. .
Development of Water Budget Database — Based on the policy option developed in the
above task, each retail agency will develop the appropriate allocation factor for each
account. Grantee will utilize Digital Map Products or another parcel map provider (GIS
analysis and County Parcel information) to develop estimates of irrigable area for each
parcel. This information-will be incorporated into this database to allow each parcel to
have a monthly water budget formulated.
Model Development and Testing — Utilizind the water budget database as the model
driver, Red Oak will develop a water budget.model that each agency will own, which
has the ability to conduct "what if scenarios. The model will have the ability'to perform:
1) fixed /variable rate adjustment, 2) water budget allocation, 3) revenue analysis, and
4) typical monthly bills comparison.
Task 5 Legal Input— Proposition 218. Compliance
Each agency's attorney will provide input on how its water-budget will.comply with
Proposition 248. Compliance may range from the requirement that block prices be
based on escalating expenses'or that total revenue be based on total expenses.
Task 6 Billing and Accounting System Needs and Options
To support the implementatlon of the water budget based rate structure, Reif Oak will-
conduct an assessment of current customer service and billing practices and the
information systems used for GIS /Billing. Red Oak will compare the current system with
new requirements, and prepare a Fit/Gap analysis, and then make recommendations
for either a change in procedures or systems with suggested tasks, schedule, and.
estimated.resource needs. The report will be provided in Microsoft Excel or Microsoft
Access format to the retail agency for its use,
Task 7 Outreach.
Grantee, the retail agencies, and Red Oak will develop generalized information
templates for use by each agency. The individual agencies will then develop specific
outreach materials and a tailored approach for their use. The main goal of this task is to
educate the public on the benefits associated with water budgets and how they function.
!T7
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates. in Orange County
for Water Management and Droughts
Drought Grant
Task 8 Implementation
It is anticipated that 4 out of the 11 retail agencies will implement water budget based
rate structures. Red' Oak will be available for attendance at Board of Directors or
City Council presentations for support and will develop presentation templates outlining
options for generalized customer support. Individual agencies are responsible for all
implementation phases and customer support and response for implementation within
their service areas.
Task 9 Final Report
Grantee; with the assistance of Red Oak, will develop individual reports that summarize
the activities, findings and conclusions for each retail agency. The report will discuss
the individual budget allocation used and the expected savings to be achieved. An
overall report summarizing the results will be prepared for presentation-to Department of
Water Resources.
Task"1.0 Monitoring and Evaluation
With the completion of the-final report, Grantee.will conduct annual mohitoring and
evaluation to determine actual savings from this project. Grantee will conduct this.
analysis by using the-double difference, a standard statistical approach when
conducting project evaluation.
Schedule- Outlined below is the general schedule. However, based on the water
supply situation, many of the agencies may want the schedule accelerated to allow .
implementation by January 2009. This accelerated schedule will be accommodated as
best as possible, should the request arise.
Task 1: General Administration
Task 2: Identify Cost and Agency Revenue Requirements
Task'3: Cost of Service Analysis
Task 4: Develop Rate Structure and Water Budgets
Task 5: Legal Input - Prop. 218 Compliance
Task 6: Billing and Accounting System Needs and Options
Task 7: Outreach
Task 8: Implementation
Task 9: Final Report
Task 10: Monitoring and Evaluation
23
Month 1 -24
Month 1 -6
Month 2 -7
'Month 3 -18
Month 4-20
Month 3 -18
Month 12 -24
Month 20 -24
Month 23 -25
Month 26-64
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
Water Quantity — One of the quickest drought response mechanisms that can be
developed is additional water conservation via budget based rate structures.
Documented water savings on the order of 20% have been achieved via implementation
of these types of rate structures. For this project, a conservative estimate in annual
savings is 10,800 acre -feet per year, assuming an average agency has 18,000 acre -feet
of annual water sales and 15% savings with 4 implementing agencies. The water saved
includes both groundwater resources and imported water from MWD from the Colorado
River and the State Water Project. The annual savings are anticipated in perpetuity.
In- stream Flow — The resulting annual savings will result in an avoided stream diversion
from the Bay -Delta and the Colorado River basin.
Water Quality — By reducing the quantity of irrigation water being wasted, runoff from
irrigated areas will be reduced and the transport of sediments and contaminants into
waterways, streams and the ocean will be reduced.
Water Shortages/Drought Mitigation —This project will result in significant water savings .
by reducing the water demand by about 15 %. Not only will the,project benefit urban
communities in times of shortages and drought, the anticipated savings are annual and
will persist in perpetuity. The annual value of water saved at an existing melded water
price in Orange County of $491 per acre -foot is $10 million (2008 dollars):
Ener —Based on the California Energy Commission 2005 Integrated Energy Policy
Report, energy savings associated with outdoor water conservation programs in
Southern California is 3,300 kWh /AF. With project water savings of 10,800 AF annually,
energy savings are estimated at more than 35 million kVyh annually. '
Other Benefits — Water budget based rate structures provide many types of benefits.
When implemented„ they provide direct feedback to customers at each billing cycle to
measure how residents are doing compared to a scientifically based. budget estimate.
When high water users are identified, agency customer service representatives can
easily target them for education and intervention measures. Equity among users is
critical. These rate structures measure customer performance against .a scientific norm
so all customers are evaluated on the same basis. Water conserving customers are
rewarded by remaining within the budgets while non -water conscious customers are
"charged" for water they are wasting. Water budget based rates can be used to
manage water resources both.during "drought" situations and'on an on -going basis to.
result in permanent water savings. Irrigation or water system components that may
need repair-or adjustments that might otherwise go unseen can be flagged.
Environmental benefits also accrue by reducing water runoff and the transport of
24
Agreement .4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
sediments and contaminants into waterways, streams and the,ocean. Certain.water
budget rate structures are known to improve revenue instability, a financial concern
when designing conservation rate structures. These types of rates also result in a
reduction in peak demand,.which provides financial savings in capital improvement
costs.. Savings in.treatment costs on the sewer side.also result.
Deliverables
The Grantee is responsible for the following deliverables:
Quarterly reports documenting progress,, task completion, and project success as
detailed in Exhibit B; Attachment 1.
Draft final report and associated data at Agreement end date, detailed in Exhibit B,
Attachment 2.
Final report due approximately two months following the Agreement end date, as
detailed in Exhibit B, Attachment 2.
Annual Report of Benefits and Costs fogy 5 consecutive years, as detailed in Exhibit B,
Attachment 3.
Projected benefits will be validated through data analysis and reported according
to Monitoring and Verification Plan.
B -3 Project Monitoring and Evaluation Plan
Pre - Proiect Conditions. Baseline Data. Assumptions and Accuracvof Data
The pre - project data exist in documents such as the Orange County Water Agencies
2007 Water Rates and Water System Operations and Financial Information Report.
Proposed Task i provides baseline data which includes agency- specific costs and
revenue requirements.
Mdnitorinq Plan and Performance Measures
The Monitoring Plan will include annual water use information and ,performance
measures such as total and unit water use (per person, per residential unit, per
employee, etc).
Post Proiect Verification of Results and Benefits
Comparison to customer and total-annual use will be made to evaluate temporal water
savings towards the 15% goal.
25
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
Estimated Monitoring and Evaluation Costs
Up -front billing system software modifications to enable monitoring report generation
costs are estimated at $10,000 per agency. The annual report generation and
evaluation cost are estimated at $5,000 per agency.
8=4 Qualification of Applicants and Cooperators
Grantee is the third largest member agency of Metropolitan Water District and serves a
population of about 2.3 million residents through 28 client agencies. Grantee has been
instrumental in coordinating implementation of water conservation programs on a
regional basis in Orange County since the early 1990's and was one of the first
agencies to sign the California Urban Water Conservation Council (CUWCC) MOU for
implementation of the BMPs. Grantee has a.nurriber of ongoing programs such as.this
where.programs are facilitated for a large number of agencies to gain economy of scale
and where the management and administration of the program can be centered in one
location for the benefit of many agencies. Currently, Grantee is administering a variety
of programs including SmarTimer and Sprinkler Nozzle Rebates, Industrial Process
Improvements, Toilet and Clothes Washer Rebates and plumbing, fixture rebates for
businesses operating in Orange County. For this project, 11 of our agencies will be
participating representing over a.million residents and 230,000 AF of water sales on an
annual basis. The numbers in the brackets indicate population served and total water
sales acre -feet in FY 2006 -071, respectively. The 11 cooperating agencies include City
of Tustin •(62,100; 13,2111, City of Buena Park (82,450; 18,402), City of Huntington
Beach (196,954; 31,649 ), Yorba Linda Water District (75,400; 24,021), Laguna Beach
County Water District (22,000; 4,105), El Toro Water District (50;800; 11,813), Moulton
Niguel Water District (165,91 t3; 41,682), Trabuco Canyon Water District (14,335; 5,114),
Santa Margarita Water District (160,000; 39,310), the City of Garden Grove (171,000;
34,076) and South Coast Water District (41,600, 8,373).
Malcolm Pirnie — Red Oak Division - Red Oak will be the consultant for Grantee and its
client agencies. Red Oak consulting is one of the leading firms that specialize in
analyzing and implementing water budget based rate structures. Red Oak has shaped
and developed the industry's standards by writing its leading manuals and
speaking /teaching at national conferences. Red Oak's Information Management
practice is uniquely qualified to assist in the Customer Information System and Utility
Billing (CIS /UB) assessment task. Red Oak has a wide range of experience in all facets
of CIS /UB, ranging from assessment of business processes related to CI$ /UB, to -
assisting in solution evaluation, selection and procurement, to project implementation
assistance, to actual modifications of custom billing systems. Red Oak's Information
Management team also has a strong IT capability, having developed numerous custom
26
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
Management team also has a strong IT capability, having developed numerous custom
solutions for our clients, in areas related to billing and beyond.
Digital Map Products - Grantee will utilize the services of Digital Map Products or
another provider of similar information to develop estimates of irrigable area and
monthly irrigation budgets for all parcels within the participating client agencies. This
information is critical to the development of the irrigation water budget portion for-each
customer and will provide the retail agencies with information that is not currently
available. This information will then be entered into the modeling software to develop
and test options for the rate structure tier width. Even if the irrigation budgets are not
incorporated directly into the billing systems, they can be utilized to measure actual
water use compared to budgeted water use and non - efficient water users for
implementation of customer interventions.
B -5 Outreach, Community Involvement, and Acceptance
Outreach and community involvement activities are an important component of this -
project and'are covered in Task 7. Outreach will begin in Month 12 and extends to the
end of the second year_ Red Oak will develop ge6eralized information templates
available for use by each agency. ' The individual agencies will develop speck
materials and approach to reach out to their customers.
B-6 Budget (Exhibit C)
The State's funding share will be for tasks identified in Exhibit C. Total State share
expenditure must not exceed $685,000.00.
B -7 Schedule for Progress Reports and Payments:
A Quarterly Project Progress Report and invoice is due every three months after
execution of agreement.
A Draft Final Report is due by the end of Agreement end date.
A Final Report and Retention invoice is due two months following Agreement end
date.
Annual Report of Benefits and Costs are due once a year for five consecutives years
following the anniversary of Agreement end date.
The Agreement is executed on date that the Chief of Department of Water
Resources, Office of Water Use Efficiency and Transfers signs, and terminated as
specified in the SECTION 2 TERM OF STATE GRANT.
27
Agreement 4600008312
Municipal Water -District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
Exhibit B - Attachment 1
DWR 2008 Urban Drought Assistance Grant (Prop 50)
Quarterly Progress Report.
Date:
Contract Number:
Contractor:
Contact Person:
Phone:
Email:-
Quarter End Date:
Total State Funds Expended to Date: $
Signed, Reviewed by Designated Representative .
Progress Achieved:
Funds Expended
Deliverable % Complete (DWR Grant) {Local Share)
Task 1
(Description)
Task 2
(Description)
Task 3
k
Total
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
(Description)
Task 4
(Description)
Activities Performed:
• - Describe the activities and deliverables completed during the reporting period;
• State the progress toward completion of the tasks. compared to the Project
schedule. Is the project on schedule or are there problems and delays?
Description of Estimated Benefits to Date:
Water Quantity — Local and.State (list units in acre feet)
Annual water savings reported as:
• Recoverable (applied water reduction);
• Irrecoverable (real water or net water savings);
'Total water savings for the life of the project reported as:
• Recoverable. (applied water reduction);
® Irrecoverable (real water 'or net water savings);
List targeted watershed, rivers and-tributaries conveying water to the Bay- Delta.
16-stream Flow — Local and State (list units in. acre feet)
Water Quality — Local and State "
Drought Mitigation(s) —
Water Shortage Management -
'Ener — Local and State (list units in kilowatts)
• Energy savings
Next Quarter Projections: (Describe planned -activities for the next quarter)
Please submit one original and one copy of the progress report.
29
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
Exhibit B- Attachment 2
DWR 2008 Urban Drought Assistance Grant (Prop 50)
Draft /Final Reports
Date:
Contract Number:
Grantee:
Contact Person:
Phone:
Email:
Description of the Project
• Describe the project
Description of Project Goals and Objectives
• Ust'the original goals and objectives;
• : Detail of changes and /or adjustments made during the project;
• Detail of causes to support changes and/or adjustments.
Description of Benefits
Water Quantity — Local and State (list units in acre feet)
Annual water savings reported as:
• Recoverable (applied water reduction);
• Irrecoverable (real water or net water savings);
Total water savings for the life of the project reported as:
• Recoverable (applied water reduction);
• Irrecoverable (real water or net water savings);
• List targeted watershed,. rivers and tributaries conveying -water to the Bay- Delta.
In- stream Flow — Local and State (list units in acre feet)
• List targeted watershed, rivers and tributaries conveying water to the Bay - Delia.
Water Quality — Local and State
a List water savings in acre feet;
• List targeted watershed, rivers and tributaries conveying water to the Bay - Delta.
30
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County .
for Water Management and Droughts
Drought Grant
Drought Mitigation(s)—
Water Shortage Management -
Enemy — Local and State (list energy units in kilowatts)
• Energy savings
Other—
Include economic or environmental benefits if any.
Tasks and Statement of Work:
• As'identified in the Contract
• Detail of changes and /or adjustments-throughout the project
• Detail of causes to support changes and /or adjustments'
As identified in the Contract
Monitoring and Assessment:
• Detail of changes and/or adjustments throughout the project
• Detail of cause`s to"-support changes acid /or adjustments
Budget:.
• Detail of changes and /or adjustments throughout the project
• Detail of causes to support changes and /or adjustments
Deliverables:
• Detailof changes and /or adjustments throughout the project
• Detail of causes to support changes and /or adjustments
Schedule or Timeline for Progress /Payment/Final Report:
Detail . of changes and /or adjustments throughout the project
• Detail of causes to support changes and /or adjustments
Cooperators:
• Description of each cooperator /sub - contractor
• Detail. of each cooperators performance
• Detail of each cooperators impact on the project outcome
Final Statement:
• Summary of expected and realized outcome
31
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water. Management and Droughts
Drought Grant
Exhibit B- Attachment 3
DWR 2008 Urban Drought Assistance Grant (Prop 50)
Post.Project Annual Report of Benefits & Costs
Annual reports of benefits and costs are required to be submitted for 5 consecutive
years after the contract end date.
Date:
Description of Benefits and Costs
Was there any revision in benefits and costs since the completion of the project;
Describe the impacts of the implementation of the project on the Grantee's water
management since the project was completed.
Water Quantity — Local and State (list units id acre feet)
Annual water savings reported as:
• Recoverable (applied water reduction);
® Irrecoverable (real water or net water savings).
Total water savings for the life of the project reported as:
9 Recoverable (applied water reduction);
® Irrecoverable. (real water or.net water savings);
List targeted watershed, rivers and tributaries conveying water to the Bay- Delta.
In- stream Flow— Local, and State (list units in acre feet) .
m List targeted watershed, rivers and tributaries conveying water to the Bay - Delta.
Water Quality — Local and State
List targeted watershed, rivers and tributaries conveying water to the Bay - Delta.
Drought Mitigationfs)-
Water Shortage Management -
Energy — Local and State (list units in kilowatts)
Energy savings
Other -
Include economic or environmental benefits if.any.
32
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
Exhibit C Project Costs
0
Attachment B
Raftelis Financial Consultants Proposal for MWDOC
M
RFC
RAFTELIS FINANCIAL
CONSULTANTS, INC.
July 15, 2010
201 S. Lake Ave, Suite 301 Phone 626.583.1894 www.raftelis.com
Pasadena • CA • 91101 Fax 626.583.1411
Mr. Karl Seckel
Assistant General Manager
Municipal Water District of Orange County
P.O. Box 20895
Fountain Valley, CA 92728
Subject: Scope of Service for Water Budget Meetings and Evaluation
Dear Mr. Seckel:
Raftelis Financial Consultants, Inc. (RFC) is pleased to present this scope of service to
assist the Municipal Water District of Orange County (District) in coordinating,
educating, and evaluating the Water Budget Rate Study for the Department of Water
Resources (DWR) Grant. The scope for the various tasks is shown below.
SCOPE OF WORK
Task 1— Attend and Participate in District Meeting(s)
RFC staff will attend, participate, and present information at District sponsored or
authorized meetings. The District will specify which meeting(s) RFC will attend and the
level of participation required. This could include the kick off meeting, educational
meetings with the stakeholders and/or elected officials on the benefits and challenges
associated with water budget rates or conference calls with the District to discuss the
logistics of interfacing with staff for the DWR grant. In meeting(s) where RFC has a
speaking role, RFC staff will prepare the appropriate PowerPoint presentation and
provide this to the District.
Meetings: Up to five (5) site meetings; 8 hours per meeting including preparation time.
Deliverable: PowerPoint presentation, when applicable.
Task 2 — Provide General Input and Assistance to District for Grant Management
RFC staff will provide input and assistance to District staff as requested in the following
areas:
• Provide input to the Member Agencies on how to handle particular issues that
may arise during the grant administration.
DWR Grant Assistance Page I
• Look for opportunities for furthering common efforts among the agencies related
to implementation of budget based tiered rates.
A budget of 40 hours has been allocated to accomplish these tasks.
Task 3 — Evaluate Water Budget Savings
Part of the requirement of the DWR grant is for the District to evaluate the savings that
can be attributed to the implementation of a water budget rate structure. Water budget
rate structures have empirically shown water savings of between 10 to 20 %. To conduct
this analysis, RFC will use the double difference approach, a standard statistical
approach, when conducting project evaluation.
To calculate the potential water savings, RFC will use two sets of data, one from agencies
that implemented a water budget rate structure and the other from agencies that have not
participated, which is the control group. In the ideal world, the only difference between
these two agencies is that one participated and the other did not. Based on the single
family data that the District provides to RFC, RFC will calculate the average water use by
account and, if available, by parcel size. RFC will then compare the difference between
the water use prior to and after the implementation of a water budget rate structure. This
time period difference will also be calculated for the control group. Then, RFC will
calculate the difference between the two groups to estimate the actual savings that can be
attributed to the water budget rate structure.
Meetines: None.
Deliverable: Technical memo (3 to 5 pages) that shows the steps taken to conduct the
analysis and the estimated savings that can be attributed to the water budget rate
structure.
Estimated hours: 100 hours
Task 4 — Annual Update on Evaluate Water Budget Savings
Based on the work developed in Task 3, RFC will update this analysis on a yearly basis
for five years for up to five participating agencies and five control groups.
Meetines: None.
Deliverable: Update the technical memo from Task 3 on an annual basis for five years.
Estimated hours estimate for each subsequent years calculations: 40 hours
DWR Grant Assistance Page 2
FEES
RFC will perform the services described above on a time and material basis assuming the
estimated hours shown in the table below. Tasks 1, 2 and 3 will be conducted for a not to
exceed amount of $36,350. The table below shows the breakdown of cost by tasks.
1. Attend and
Water
FEE
in District
5
Total estimated
Hourly
Professional
WE
M1
M1
M1
r�
t .r
Total fees 1 $
Estimated ex enses $
Total Fees and Ex ense5 s
Total
$ 8,000
$ 8,000
801 1 $ 18,000
80
175
$ 34,000
$ 2,350
$ 36,350
The billing rates for Task 4 will be based on RFC standard rates in the respective year.
It has been a pleasure working with you in the development of this scope of work and we
look forward to assisting you with this important study. If you have any questions, please
call Sanjay Gaur at (213) 327 -4405.
Respectfully submitted,
RAFTELIS FINANCIAL
CONSULTANTS, INC.
0
E�
Sudhir Pardiwala
Vice President
Accepted by:
MUNICIPAL WATER DISTRICT OF
ORANGECOUNTY
a
Date:
DWR Grant Assistance Page 3
RFC
RAFTEUS FINANCIAL
CONSULTANTS, INC.
July 15, 2010
201 S. Lake Ave, Suite 301 Phone 626.583.1894 www.raftelis.com
Pasadena • CA • 91101 Fax 626.583.1411
Mr. Karl Seckel
Assistant General Manager
Municipal Water District of Orange County
P.O. Box 20895
Fountain Valley, CA 92728
Subject: Scope of Service for Water Budget Meetings and Evaluation
Dear Mr. Seckel:
Raftelis Financial Consultants, Inc. (RFC) is pleased to present this scope of service to
assist the Municipal Water District of Orange County (District) in coordinating,
educating, and evaluating the Water Budget Rate Study for the Department of Water
Resources (DWR) Grant. The scope for the various tasks is shown below.
SCOPE OF WORK
Task 1— Attend and Participate in District Meeting(s)
RFC staff will attend, participate, and present information at District sponsored or
authorized meetings. The District will specify which meeting(s) RFC will attend and the
level of participation required. This could include the kick off meeting, educational
meetings with the stakeholders and/or elected officials on the benefits and challenges
associated with water budget rates or conference calls with the District to discuss the
logistics of interfacing with staff for the DWR grant. In meeting(s) where RFC has a
speaking role, RFC staff will prepare the appropriate PowerPoint presentation and
provide this to the District.
Meetings: Up to five (5) site meetings; 8 hours per meeting including preparation time.
Deliverable: PowerPoint presentation, when applicable.
Task 2 — Provide General Input and Assistance to District for Grant Management
RFC staff will provide input and assistance to District staff as requested in the following
areas:
• Provide input to the Member Agencies on how to handle particular issues that
may arise during the grant administration.
DWR Grant Assistance Page 1
• Look for opportunities for furthering common efforts among the agencies related
to implementation of budget based tiered rates.
A budget of 40 hours has been allocated to accomplish these tasks.
Task 3 — Evaluate Water Budget Savings
Part of the requirement of the DWR grant is for the District to evaluate the savings that
can be attributed to the implementation of a water budget rate structure. Water budget
rate structures have empirically shown water savings of between 10 to 20 %. To conduct
this analysis, RFC will use the double difference approach, a standard statistical
approach, when conducting project evaluation.
To calculate the potential water savings, RFC will use two sets of data, one from agencies
that implemented a water budget rate structure and the other from agencies that have not
participated, which is the control group. In the ideal world, the only difference between
these two agencies is that one participated and the other did not. Based on the single
family data that the District provides to RFC, RFC will calculate the average water use by
account and, if available, by parcel size. RFC will then compare the difference between
the water use prior to and after the implementation of a water budget rate structure. This
time period difference will also be calculated for the control group. Then, RFC will
calculate the difference between the two groups to estimate the actual savings that can be
attributed to the water budget rate structure.
Meetines• None.
Deliverable: Technical memo (3 to 5 pages) that shows the steps taken to conduct the
analysis and the estimated savings that can be attributed to the water budget rate
structure.
Estimated hours: 100 hours
Task 4 — Annual Update on Evaluate Water Budget Savings
Based on the work developed in Task 3, RFC will update this analysis on a yearly basis
for five years for up to five participating agencies and five control groups.
Meetin¢s: None.
Deliverable: Update the technical memo from Task 3 on an annual basis for five years.
Estimated hours estimate for each subsequent years calculations: 40 hours
DWR Grant Assistance Page 2
FEES
RFC will perform the services described above on a time and material basis assuming the
estimated hours shown in the table below. Tasks 1, 2 and 3 will be conducted for a not to
exceed amount of $36,350. The table below shows the breakdown of cost by tasks.
FEE
Meetings
Hours Rei uirements
Total
Gaur
Fin Cons
rate in District Meeting(s) )
5
40
-
S 8,000
i ut and Assistance
40
S
8,000
id et Savings - tst Year
20
80
$
I8,000
Total estimated hoursi 100
Hourly rates $ 200
Professional Fees $ 20,000
Total fees
Estimated expenses
Total Fees and E>yenses
80
S 34,000
$ 175
$ 14,000
$ 34,000
S 36,350
$ 36,350
The billing rates for Task 4 will be based on RFC standard rates in the respective year.
It has been a pleasure working with you in the development of this scope of work and we
look forward to assisting you with this important study. If you have any questions, please
call Sanjay Gaur at (213) 327 -4405.
Respectfully submitted, Accepted by:
RAFTELIS FINANCIAL MUNICIPAL WATER DISTRICT OF
CONSULTANTS, INC. ORANGE COUNTY
L-A
Sudhir Pardiwala
Vice President Title:
DWR Grant Assistance Page 3
Attachment C
Red Oak Consulting Invoices /Proposal
For Newport Reach
P A T H W A Y S
REMAK
CONSULTING
• A DIVISION Of MALCOLM °IPNIr
Bill to: City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA 92658 -8915
AttenUca: Steve Myrter, P.E.
Utilities Director
Rcference: Newport Beach Water Raze Study
T O L A S T I N G 5 0 L U T 1 0 N 5
Niu�m` r: 7-V7,
June 04, 2008
Project Numbet(s): 5317004 Statement Number: 2
Invoice for Professional Services provided through Jonc 04, 200$
Contract Summary
22.60 %Complete To Date
Less Previously Billed
Amount Due Ills Invoice
Remit Payments only to:
zu
MALCOLM PIRNIE, INC.
1 V
23440 Network Place
or
Chicago, IL 60673 -1234
1
$68,1 .00
9,932.00
�vJO 2 t J.Ii� 7` $12,220.0(
t�fgp`h y wilr'e'transfer please direct lo:
( LM PIRNIE. INC.
ABA # 021000021
Account # 128035990
Swift # CHASUS33
Please reference invoice number on payment: 100083803
Federal T" ID Number: 13- 2653703
0* GOOD /SERVICES
t� DATE; DEPT
PO /R #:
BUDGET #: GSbc
tZB ,►��•�`Ct�i�-Id- •oa>�`��01�1 — C�la,�2-b.oc>> _ ��.8r
P A T'�(1 Ni(J/ . A Y S T O L A S T I N G 5 0 L U T 1 0 N S
BQA
• • ° CONSULTI
• A DIVISION O! YALCO LY VIgN yAT[7 ,
Nu�m Y :100082209 ''
Bill to: City of Newport Beach ' : -- L April 22, 2008 3300 Newport each, CA ou P,
Newport Beach, CA 92658.8915 � 1 CJ
.Attention: Steve Myrter, P.E.
Utilities Director
Reference: Newport Beach Water. Rate Study
Project Number(s): 5317004 Statement Numbej(--)
Invoice for Professional'8ervices provided through April 22, 2008
Contract Summary °'?. $88,177.00
8.75 % Complete To Date :•�.: `i .,i y 1 $7,712.00
Less Previously Billed All
Amon w vat 1t j�ni '� J .' $7,712.00 ••:�
Remit Payments Daly to: 4 If you wish to pay by wire transfer please dtr lo-
MALCOLM PIRNIE, INC. } MALCOLM PIRNW, INC.
23444 Network Place or ABA # 021000021
Chicago, DL60673 -1234 l Account # 128035990
Swift # CIILASUS33
! mm ref Invoice number on payment 1000=89
Federal Tax ID Number, 13. 2653703
ov To e�.2 -. -2z
GOOD /SERVICES RECEIVED
DATE- s 1i5 f.1
PON:DES
BUDGET #:
RUTH. SIG: i
P A T N W A V S T O L A S T I N G a 0 L U T 1 O N S
0: -
RELDAK ..
.mss ....
CONSULTIN b`d"'� t:.......
A o:risiox or aA:coL° nn x. ,.(.. .. .
MICE �o \8bP
Number: 100089700
Bill to: City of Newport Beach
�
]4, 2008
November —
3300 Newport Blvd
Newport Beach, CA 92658 -8915
�7`()(1D� SE�� \�IC..ES RECEI. ED
DATE: DEPT,
Attention: Steve Myrter.P>.
#
Utilities Director
f"Vfp :i`�ld
BUDG::T #: 0°
Reference: Newport Beach Water Me Study
RUTH. SIG
Project Number(s): 5317004
StatementMlmtb3
Invoice for Professional Services provided through November 14, 2005
Contract Summary
$8f.177.00
38.40 % Complete To Date
$33,8 .00
_,mot
Less Previously Billed
Amount Due This Invoice •,
5 � {
$13931.00
Remit Payments only to:
J If to pay by wire transfer please direct to:
MALCOLM PIHWIE, INC. �.
�'<,
'� ' ' ALCOLM PIRME., INC.
23444 Network Place
�', /�` ABA # 021000021
`
Chicago, IL 60673 -1234 v I Account # 128035990
SwIR #CHASUS33 '
Please reference invoice number on payment: 100089760
Federal Tax ID Number. 13- 2653703
is `>� 7
P �nN w A Y S T O L
Sold'. I, MIDAK
CONSULTING
• A DIVISION OF MALCOLM PIC41C
I1�Ti7 ICE
Numb r: 100093975
But to: City of Newport Beach
3300 Newport Blvd. - -
Newport Beach, CA 92658 -8915
Attention: Mr. George Murdoch
Utilities Director
Reference: Newport Beach Water Rate Study
A 5 T I N G 5 0 L U T 1 0 N 5
Project Numbel(s): 5317004 Statement NurdGe�4 j
Invoice for Professional Services provided January 01, 1900 through March 17, 2009
Contract Summary $88,177.00
.5335 °/D Coroplete To Date . +'� $47 ,044.00
Less Previously Billed !.; >; ��4F "i• �',. $i3'ttt15'#�°
Amouat Doe This Invoice ,' `v :. 'i $13,181A0
\\01
Remit Payments only to: _.� -�' If you wish to pay by wire transfer please direst to:
MALCOLM PIRNK INC. MALCOLM PIRNM INC.
23444 Network Place \' .. or ABA #021000021
Chicago, IL 0673-1234 ..^ i Account # 128035990
Swift # CELASUS33
Please reference Invoice number on payment: 100093975
Federal Tax ID Numbers (32653703
Malcolm Pirtle refers to Malcolm Pirate, Inc, and Hs subsidiaries and affiliates.
P A T H W A Y 5 T O
°° ®e REBDAK
• ® ®° CONSULTING
A DIYIsIox or MALC°L. PIONIL
1N W
Nam :100095529
Bill to: City of Newport Beach
3300 Newport Blvd
Newport Beach, CA 926511-8915
Attention: Mr. George Murdoch
Utilities Director
Reference: Newport Beach Water Rate Study
L A S T I N G ,5 O L U T 1 0 N 5
a vA
April 29, 2009 99��
Project Numbers) 5317004 Statement Number: 5
Invoice for Professional Services provided through April 28, 2009
Contract Summary
72.38 %Complete To Date
Less Previouly Billed
Amount Due This Invoice
Remit Payments only to:
MALC'OLM FIRNIE, INC.
23444 Network Place
Chicago, IL 60673 -1234
.n
spy 1 ®ff��'�NI.. ,
;� �':'.•1"'•: 516.780.
SIla ,/ If you wish to pay by wire numfor please direct to:
.; `. .r . ' MALCOLM PIRNIF., INC.
or
I
ABA # 021000021
Account #128038990
Swill # CE ASUS33
Please reference invoice number on payment: 100095529
Federal Tax ID Number: 13- 2653703
AUTH.
'ICES RECEIVED
Malcolm Pimle refers to Malcolm Pirnle, Inc. and Its subsidiaries and affiliates.
on 0 . REEDAK
0 - CONSULTING
. . A O1V121ON OF UALCOLN PIRNIE
Bill to: City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA 92658-8915
Attention: Mr, George Murdoch
Utilities Director
Reference: Newport Beach Water Rate Study
PATH WAYS- TO. L A S T I N G 5 0 L U T 1 0 N S
IWOICE
Number: 100109564
June 07,2010
Project Number(s): 5317004 Statement Number: 6
Invoice for Professional Services provided April 29, 2009 through May 25, 2010
Contract Summary $91.677.
100.00 % Complete To Date 7;�i77.00
Less Previously Billed
Amount Due This Invoice
$63,824.00 ✓
$27,8 0
Remit Payments only to: If you wish to pay by wire transfer please direct to:
MALCOLM PIRNIE, INC. M ALCOLM PIRNIE, INC
23444 Network Pie" or ADA # 02100002I
Chicago, IL 60673-1234 Account # 129035990
Swift # CHASUS33
Please reference Invoice number on payment,
Fedleml, Tax M Number: 113-2653703
E I TEE D
JUN 1 5 2010
pp C
SSDD
Malcolm Pirnie refers to Malcolm Pirnie, Inc. and Its subsidiaries and affiliates.
o a REBDAK
or n °° CONSULTING
• °IYILI°M or MALCOLM PIPNIC
Bill to: City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA 92658 -8915
Attention: Mr. George Murdoch
Utilities Director
Reference: Newport Beach Water Rate Study
P A T H W A Y 5 T O L A 5 T I N 0 S 0 L U T 1 0 N 5
INVOICE
Number: 100109907
June 16, 2010
Project Number(s): 5317004 Statement Number: 7
Invoice for professional Services provided April 29, 2010 through May 25, 2010
Contract Summary
103.97 Y Complete To Date
Less Previously Billed
Amount Due This Invoice
$88,177.00
$91,677.00
$88,177.00
S3,SW.00
Remit Payments only to:
if you wish to pay by whe transfer please direct to:
MALCOLM PIRNIE, INC.
MALCOLM PIRNIE, INC.
23444 Network Plan or
ABA N 021000021
Chicago, IL 60673.1234
Amount k 128035990
I
Swift 9 CIMUS33
Please reference Invoice number on payment: 100109907
Federal Tax ID Number: 13- 2653703
Malcolm Pirnie refers to Malcolm Plrnle, Inc. and Its sdbsldlarles and affilleteu.
0 ® Exhibit A
SCOPE OF SERVICES
Task 1 - Project Orientation Workshop
Red Oak will conduct a Project Orientation workshop with City Staff.
During this workshop, Red Oak will confirm the study objectives and gain
a common understanding of project team's expectations.
Prior to the Project Orientation workshop. Red Oak will provide the City
with a preliminary data request list. During the workshop, Red Oak will
discuss the data requirements to identify the appropriate source for that
data within the City.
Additionally, Red Oak will use this project orientation workshop to
discuss the implications of Proposition 218 and review additional
information that will be needed to complete the project. We will also
review and discuss in detail the forecast assumptions and City policies to
be used in the financial plan evaluation including: debt service coverage
ratios, reserve requirements, etc. In addition, we will identify the cities to
be included in the rate survey. Finally, we will clarify roles,
communication procedures, the project schedule, and due dates for
deliverables.
Task 1 Deliverables:
• Data request
• Minutes of the meeting
• Project schedule
• One project orientation meeting
Task 2 - White Paper on Conservation Rate Structures
and Prop 218
Red Oak will produce a white paper that addresses the legal concerns
associated with Prop 218 and conservation rate structures. The white
paper goal will serve as an overview for Newport Beach City Attorneys
on the rate equity issues associated with conservation rate structures
and Prop 218. It will discuss the potential legal concerns and will request
a legal response from City Attorneys.
Task 2 Deliverables:
® White paper that discusses the legal issues associated with
conservation rate structures and Prop 218
Task 3 - 10 -Year Financial Plain
Red Oak will use *FORE AST to develop financial planning models for
the water for the ten -year study period. The financial plan analysis
includes the following elements:
• Examination of the Metropolitan Water District of Southern
California's (MWD) rate increases and evaluate demand
projections for Newport Beach. We will develop different scenarios
on both the demand for MWD imported water and operational
practices to see how sensitive the ten -year financial plan will be to
these factors.
• Revenue Analysis. Using the current demand for water, Red Oak will
calculate revenue at current rates for the 10 -year study period.
• Revenue Requirements. A projection of operating expenses based
on the utility's budget and a review of historical cost trends will be
conducted in sufficient detail to:
Recognize types of expenses incurred by the system;
Project expenses for the study period; and
Recognize changes In certain costs consistent with changes in
projected utility operations.
• Bond Compliance Analysis. An analysis will be conducted to
demonstrate that the covenants and financial requirements
associated with any existing or proposed bond obligations and other
debt instruments are complied with over the forecast period.
• Reserve Requirements. An analysis will be conducted examine three
reserve requirements that we typically recommend:
• Operational and Maintenances. This is to satisfy yearly cash flow
requirement.
• CIP Reserves. This is annual contribution for future
refurbishment programs..
• Rate Stabilization Fund. This is hedge against volatility of
revenue due to weather conditions, such as drought or periods of
abnormal rain fall.
Based on the above information, Red Oak will develop a ten -year revenue
program that will maintain the water system and takes into account
foreseeable risk, such as weather.
We anticipate one meeting to confirm the revenue requirement with City
staff members. This will ensure that all foreseeable costs are accounted
for.
Task 3 Deliverables:
a Technical memorandum that highlights the assumptions used to
develop the Ten -Year financial plan
r Financial plan
® One meeting to validate the assumptions associated with the financial
plan
Task 4 - Evaluating Customer Class
For the City of Newport Beach, there are three steps required to evaluate
customer class. The first is to examine prior justification of the current
customer class. The second step is to examine individual accounts and
group them by customer characteristics. The characteristics analyzed
will include annual demands, seasonal demands, and monthly demands of
water and peaking factors. The third step is to compare the customer
class of Newport Beach with the preliminary customer class developed in
the second step. Based on this analysis we will recommend changes to
the customer classification if appropriate. We will also provide
justification for our recommended changes.
Task 4 Delliverables:
0 Technical memorandum that evaluates the customer class and makes
recommendation on potential changes
Task 5 - Cost -of- Service Analysis
Once the financial plan has been developed, we will conduct the cost-of-
service analysis to ensure each customer class pays its fair share of the
cost. As mentioned, this will ensure that the proposed rate structure
meets both the objectives of the City and the requirements of
Proposition 218 and Government Code § 54999.
In addition we will conduct a cost-of- service analysis following the
standards of the American Water Works Association. There are two steps
In this process, the functionalization of major and minor cost and the
classification. The first step, functionalization of major and minor cost, is
to assign cost drivers to each item in the ten-year financial plan. This will
include all capital operations and maintenance costs. For water there are
typically three types of cost drivers:
• Normal delivery of water cost -This is the cost associated with the
normal delivery of water, such as chemicals used for treatment.
• Peaking cost- The cost is associated with meeting peak period water
demands, such as pump stations.
E
e Customer cost -The cost associated with non-consumption factors,
such as customer support, meter reading and billing.
® Other cost - The costs that are associated with social benefits, such
as fire protection.
Once we have assigned cost drivers to each line item in the financial plan,
we will allocate these cost drivers to each customer class usage
characteristics. This is the second step of the cost-of-service analysis,
which is called classification. We will examine peaking factors, normal
delivery of water and number of customers. The final result will be
target revenue for each customer class that meets the requirement of
Proposition 218 and bases for developing fair and equitable rates.
Task 5 Delhrerables:
® Technical memorandum that summarizes the assumptions of the cost
of service analysis
Task 6 - Rate Design
Once the target revenues are estimated, we will develop rate structures
that meet this revenue requirement. For water, there are three major
steps. The first is to receive the billing database of the City's water
accounts in a PC -based electronic format that can be used to develop a
distribution pattern of water consumption. The second step is to
incorporate this information into our rate design model to conduct "what
if" scenarios on different rate design structures. For instance the model
will have the ability to determine the price of each block, given the block
width. The last step is allocation of cost between fixed and volume
components. This is an important issue due to the increase exposure of
BMP 11, which is a conservation water rate sponsored by the California
Urban Water Conservation Council. This BMP 11 states that at least 70%
of total revenue should be generated from variable rates.
In addition we will examine revenue volatility associated with each
proposed rate structure and determine the reserve requirement
associated with drought pricing.
Task 7 - Workshop on Conservation Rate Structure
Once the *FORECAST model has been developed that incorporates the
ten -year financial plan, the cost•of• service analysis and rate design, we
will conduct a sensitivity analysis within the models. This step will
0
• •
examine different scenarios that may occur within the next ten years. In
addition, we propose to conduct two workshops, where we will determine
three water rate structures that are financially sustainable, legally
Justifiable and politically acceptable for the community of Newport
Beach.
The second workshop will be with the City Council where we will present
the three defined water rate structures and the associated risk and
benefit of each option. We will recommend a water rate structure for
adoption to the City Council.
Task T Uellverables:
• Two rate workshop, one (1) with Senior Staff member, one (1) with
City Council members
• Memorandum that summarizes each Rate Workshop
Task 8 - Prepare Draft Report
We will prepare a draft report that encompasses the tf RO ECAST model
and integrates our findings from the previous tasks. We will provide a
detailed, yet easy -to -read report for City staff and policymakers. In the
case of the financial planning analysis, we will include the proposed
revenue requirement and supporting documentation on how the
proposed revenue requirement has taken into account highly probable
risks, including fluctuation in revenue due to weather conditions.
We will include a comparative matrix within the report that will identify
three neighboring utility service providers' potable water rates in
comparison to the City's current and proposed rates. We have found this
comparative analysis to be a useful tool for elected officials and City
staff in Implementing new water rates. In addition, we will provide the
City with twelve (12) copies of our draft report for review and comment.
Task B Dellverables:
0 12 copies of the Draft Report
Task 9 - Review, Revise & Present Report
We will review our draft report with City staff during a conference call.
This conference call will allow us to identify and incorporate comments
from the City's staff. Corrections and clarifications will be added to the
final report to ensure full coverage and clear explanations.
Following staff review and comment, we will present the final report,
including the recommended rate structure, at one (1) Newport Beach City
Council meeting. We are experienced in providing presentations to
various stakeholders and legislative bodies. We are particularly skilled at
presenting complex issues, such as rate studies, and presenting them to
laypersons in an understandable and concise manner.
We will provide the City with twelve (12) bound copies and one (1)
unbound reproducible copy. We will also provide our report and model to
the City on CD-ROM using MS Word, Adobe Acrobat, and MS Excel
format.
Task 4 Dellverables:
Present the final result of the Water Rate Study at one City Council
Meeting
® 12 copies of the Final Report
Task 10 - Model Delivery and Training
Over the course of this study, we will work with City staff to compile data
and analyze results from our findings. During this process of information
exchange and workshops, our Red Oak team will involve key City staff
members in the details and the mechanics of the model. We find that
"hands-on" training throughout the project is an effective way of keeping
communication lines open and allowing for new ideas to be introduced.
Following completion of the project, we will follow -up with a formal
training session to review and demonstrate the key aspects of the
models. The training will consist of reviewing methodologies used during
the study and helping the City staff understand the financial planning and
rate setting process, model design and layout, how to adjust key
variables that support the "what -if" scenario development features of
the model, and how to update the model with new budget, CIP, and
revenue Information for the ten year financial plan. At the completion of
the training, we will provide the models in Microsoft Excel format to the
City for its future use.
Task 10 Dellverables:
® Training for BAST model
IS Completed FORECAST model In Microsoft Excel format
® 0
Meetings Summary
We will participate in a total of six meetings consisting of:
• One project orientation meeting
• One revenue requirement meeting
• One rate workshop with Senior Staff members
• Two presentation at a City Council Meeting
• One training workshop on running and updating the model
Data Requirements
To complete our study, ideally, we request the following information
from the City. This list is representative, rather than comprehensive.
Additional information needs will be presented to City staff as the study
proceeds.
• The most recent Master Plan or other documentation that explains
Capital Improvement Projects. This should include the projected
number of customers, and costs broken down by growth and
deficiency;
• Financial statements or other documentation on the City of Newport
Beach for the last five years. This would include all debt service
payments and line item budgets; and
• Four years of the billing data in a PC format for the all water
accounts.
FEE
Red Oak Consulting will provide the services described herein for a lump sum fee of $88,177.
Below is an estimate of hours and costs by task.
Oaur Matthews Maros CAallano Everest
protect
Project
InstDloMl
Modal
Land
Cast of
Sorvlco
Admin
Manp9er
Dlmctor
Knawlad9e
Dewlaps,
Motysl
Enalnear
t8
Total
Hours Hours Labor Cost Estimate Total Cost
Task 1- Pealed OrlontoHOn Workshop
t8
1.
t
2
20
t
93
]5]4
is 138
]]12
Tank 2 - White Paper on Conservation Rata
Structum and Prop 210
16
4
20
1
41
7,I63
7169
Task 3 -.10 -Year Plnensial Plan
M
2
4
30
1
57
9.64
138
0)6)
Task O - EwluatMO Customer Chan
16
2
2
30
1
51
8838
8,639
Tack 5 -Ceatrol-8ervke Analysis
16
4
4
24
8
1
57
10.469
10.469
Task 6 - Rvto DoAdi
12
a
4
W
1
$1
8968
6489
Taah T •WarUMp an COlbafwtlan ROW
structure
4
2
2
M
1
81
10550
275
10634
Tank 8 - Prepare oralt Report
16
4
1
2
30
1
Sa
9,224
Task 0 - Review. Raviw and present Report
20
4
2
20
t
47
8559
13B
860)
Task 10 - Medal Delivery and Training
16
2
2
M
t
41
7030
138
7177
Total
172
31
D
10
256
1 0
1 1D
503
1 S 87350
I S 827111
iTI
This lee proposal Is a firm offer fare 6"ay period
Ll
\.I
® P A T H W A Y S T O L A S T I N G S O L U T I O N S
e b 1V,.LXJI li\
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a
• 725 South Figueroa Smet Suite 1540 • Los Angeles, CA 90017 • T (213) 6149002 • F (213) 6149003 • w .redcKkcomultlng eom
Som.
° • ° CONSULTING
w mnmoa or KwLe01b r'°na
EXHIBIT E
Schedule of Billing Rates for 200$
Title
Billing Rate
Vice President
$
285
Associate II
$
250
Associate 1
$
205
M3
$
185
M2
$
165
M1
$
140
Admin
$
89
• 725 South Figueroa Smet Suite 1540 • Los Angeles, CA 90017 • T (213) 6149002 • F (213) 6149003 • w .redcKkcomultlng eom
Attachment D
Budget Based Tiered Water Rates
Grant Sharing Proposal - April 2010
Participants
Phase 2
Digital
Mapping
Phase 1 Rate
Structure
Phase 3
IT Hardware
Software
Max Grant
Funds
Approximate
Minimum Total
Funds to Meet 7194
Local Match
Approximate Local
Funds to Meet 71%
Match
1. Garden Grove
Yes
3,000
10,000
7,000
2. Buena Park
X
X
68,000
234,000
166,000
3. Yorba Linda WD
X
X
68,000
234,000
166,000
4. South Coast WD
Yes
X
X
71,000
245,000
174,000
5. El Toro WD
Yes
X
X
71,000
245,000
174,000
6. Huntington Beach
X
X
68,000
234,000
166,000
7. Moulton Niguel
Yes
X
X
71,000
245,000
174,000
8. SMWD
Yes
3,000
10,000
7,000
9. Newport Beach
X
34,000
117,000
83,000
10. San Juan Capistrano
Yes
3,000
10,000
7,000
11. East Orange County WD
Yes
X
X
71,000
245,000
174,000
12. Mesa Consolidated WD
Yes
3,000
10,000
7,000
13. Fountain Valley
X
34,000
117,000
83,000
14. MWDOC + contingency
Yes
117,000
403,000
286,000
Totall
9
1 8
8
685,000
2,362,000
1,674,000
Unit Grant Share Per Activit
3,000
34,0001
34,000
Total Per CategoN
27,0001
272,0001
272,000
571,000
Conditions for Receipt of Grant Funds:
1. Participants must provide 71% local funds or in -kind services to receive up to 29% grant funds, up to max in the table.
2. Grant funds shown in Table cannot be exceeded unless some Participants don't use all funds.
3. Participants may "utilize" excess matching funds not required by other Participants, if available.
Attachment E
MWDOC's DRUG AND ALCOHOL FREE WORKPLACE PROVISIONS
Section 1. Introduction
Using, possessing, purchasing, selling, negotiating sale or purchase or being under the
influence of drugs, or being under the influence of alcohol, during working time, or on
District premises, including parking lots, or while operating a personal vehicle on
company business, is absolutely forbidden and will result in discharge or other discipline
as the District deems appropriate.
Section 2. Prescription Drugs:
The use of prescription drugs which would not alter an employee's work performance is
acceptable, if prescribed to the employee by a licensed healthcare provider. In the event
there is a question regarding an employee's ability to perform assigned duties safely
and effectively while using such drugs, clearance from a licensed health care provider
may be required before the employee is allowed to resume the employee's regular
duties.
Section 3. Employees Duties and Responsibilities
A. Notify their supervisor before beginning work when taking drugs (prescription
or non - prescription), which the employee reasonably believes may interfere with
the safe and effective performance of their duties;
B. Not report to work, be at work, or work while under the influence of, or while
his or her ability to perform job duties is impaired due to, on or off -duty alcohol or
drug use;
C. Not possess or use alcohol or impairing drugs or substances while on duty, at
work, or working;
D. Not directly, or through a third party, sell or provide drugs or alcohol to any
person, including an employee, while either or both employees is on duty, at
work, or working;
E. Submit immediately to an alcohol or drug test when directed by a supervisor or
manager;
F. Provide, within 24 hours of request, bonafide verification of a current valid
prescription for any potentially impairing drug or medication identified when a
drug screen /test is positive. The prescription must be from a licensed health care
provider and in the employee's name; and
G. Report any conviction received pursuant to a criminal drug statute for
violations for conduct occurring on or off District premises while conducting
District business. A report of conviction must be made to the Administrative
21
Services Manager within five (5) days after conviction, as mandated by the
Federal Drug -Free Workplace Act of 1988.
H. The unlawful manufacture, distribution, dispensing, possession or
consumption of any controlled substance is prohibited anytime an employee is on
duty, at work or working.
I. Any violation of this section and other provisions of this Policy may result in
discipline, up to and including termination.
Section 4. Alcohol at District Sponsored Events:
With prior approval of Management and in Management's sole discretion, the District
may allow employees to consume moderate amounts of alcohol at District sponsored
social events outside of normal business hours where such use is appropriate in the
circumstances. Employees who are found to be under the influence of alcohol, or who
engage in misconduct at such events, are subject to discharge or discipline, in
accordance with District processes and procedures.
Section 5. Pre- Employmerit Testing:
A. As a condition of every offer of employment or any promotion or new
assignment, the District reserves the right to require any new hire to undergo and
successfully complete a blood, urine, or other chemical test for drugs or alcohol.
B. The drug and /or alcohol test may test for any substance which could impair an
employee's ability to perform the functions of their job effectively and safely,
including, but not limited to, prescription drugs, alcohol, and other controlled
substances.
C. All testing (including sample collection, chain of custody and laboratory
services) shall be conducted in accordance with the approved procedures of the
substance Abuse and Mental Health Services Administration, formerly NIDA. The
results of testing shall be reviewed by a medical review officer, who shall be a
licensed physician, possessing appropriate training, and knowledgeable about
substance abuse disorders.
D. Pre - employment drugs and /or alcohol test result
1. A positive result form a drug and /or alcohol analysis may result in the
applicant not being hired where the applicant's use of drugs and /or
alcohol could affect requisite job standards, duties or responsibilities.
2. If a drug screen is positive at the pre - employment physical, the
applicant must provide, within 24 hours of the request, bona fide
verification of a valid current prescription for the drug identified in the drug
screen. If the prescription is not in the applicant's name or the applicant
does not provide acceptable verification, or if the drug is one that is likely
NA,
to impair the applicant's ability to perform the job duties, the applicant may
not be hired.
Section 6. Reasonable Cause Testing:
A. As a condition of continued employment, the District may require any
employee to undergo and successfully complete a blood, urine, or other chemical
test for drugs or alcohol whenever the District has reasonable suspicion to
believe the employee is under the influence of or impaired by drugs or alcohol
while on duty, at work, or working.
B. A determination that an employee is under the influence of or impaired by
drugs or alcohol will be based on specific personal observations of any of the
following, which alone or in combination, may constitute reasonable suspicion
depending upon the circumstances in which the behavior is observed and /or
reported:
1. Bloodshot eyes;
2. Glassy eyes;
3. Dilated pupils;
4. Slurred Speech;
5. Odor on breath;
6. Drowsiness;
7. Euphoria;
8. Mood swings;
9. Inattentiveness;
10. Excitement and confusion
11. Irritability;
12. Aggressiveness;
13. Shaking or erratic movement;
14. Disorientation;
15. Unsteady walking and movement;
16. An accident involving District property, where it appears the
employee's conduct is at fault;
17. Physical altercation;
18. Verbal altercation;
19. Unusual behavior;
20. Use or possession of alcohol, drugs or paraphernalia; and /or
21. Information obtained from a reliable person with personal knowledge.
23
C. Any Manager or supervisor requiring an employee to submit to a drug /and or
alcohol test should document in writing the facts constituting reasonable
suspicion that the employee in question is impaired or under the influence. A
manager or supervisor's failure to comply with this paragraph does not invalidate
the directive to submit to testing.
D. All testing will be conducted at a clinic or laboratory selected by the District,
with appropriate safeguards for privacy, confidentiality, and accuracy. Test
results will be kept confidential to the fullest extent required by law, and will be
maintained separate from the individual's personnel file. All testing (including
sample collection, chain of custody and laboratory services) shall be conducted
in accordance with the approved procedures of the Substance Abuse and Mental
Health Services Administration, formerly NIDA. The results of testing shall be
reviewed by a medical review officer, who shall be a licensed physician,
possessing appropriate training, and knowledgeable about substance abuse
disorders. The manager of supervisor may arrange for the employee to be
transported to a testing facility, and then home afterwards. The manager or
supervisor may also notify appropriate law enforcement agencies.
E. The reports or test results may be disclosed to District management on a
strictly need -to -know basis and to the tested employee upon request.
Disclosures, without patient consent, may also occur when: (1) the information is
compelled by law or pursuant to a lawfully issued subpoena; (2) the information
has been placed at issue in a formal dispute between the employee and the
District; (3) the information is to be used in administering an employee benefit
plan; or (4) the information is needed by medical personnel for the diagnosis or
treatment of the patient who is unable to authorize disclosure.
F. Managers and supervisors shall notify their department head or designee
when they have reasonable suspicion to believe that an employee may have
controlled substances in his or her possession or in an area not jointly or fully
controlled by the District. If the department head or designee concurs that there
is a reasonable suspicion of illegal drug possession, the department head shall
notify the appropriate law enforcement agencies.
Employees are required to cooperate with the District and its clinic or laboratory
in conducting tests. Employees who refuse to undergo testing or who interfere
with the testing process, including but not limited to interference by unreasonable
delay or contamination or tampering of the sample, will be subject to immediate
discharge or discipline.
Employees who test positive, fail to cooperate with testing procedures, or
otherwise violate this policy are subject to discharge or other discipline.
In any case involving unusual or extenuating circumstances, the District in its
sole discretion may allow an applicant or employee who tests positive to
commence or continue employment, subject to the condition that the employee
undergo some form of treatment for addictions or abuse of drugs and alcohol as
24
determined by the District, in its sole discretion and submit to periodic or random
testing as required by the District.
Section 7. Accommodation for Drug and Alcohol Rehabilitation Programs:
The District will reasonably accommodate any employee who comes forward before
violating this policy and requests to enter voluntarily into a drug or alcohol rehabilitation
program. Such requests will be kept confidential as provided by law. Once an employee
violates this policy, however, any request to enroll in a rehabilitation program in lieu of
discharge or discipline will be left to the sole discretion of the District, and will require
random testing and other necessary follow -up measures. Employees who wish to enroll
in drug or alcohol rehabilitation are encouraged to come forward before they are found
in violation of this policy.
041
CITY OF
o�
10 21Ct2
NEWPORT BEACH �
City Council Staff Report Agenda
9<IFp RH`
April 10, 2012_
�J
�c
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL `
FROM: Municipal Operations Department
Mark Harmon, Municipal Operations Department Director
949 644 -3055, mharmon @newportbeachca.gov
PREPARED BY: George Murdoch, Utilities General Manager
APPROVED: O k iiS
TITLE: Agreement for Participation in Water Budget Based Tiered Rate
Grant Program
ABSTRACT:
Staff is submitting a Water Budget Based Tiered Rate Grant Program agreement with
Municipal Water District of Orange County ( MWDOC) to participate in the grant
awarded to MWDOC by the California Department of Water Resources (DWR).
RECOMMENDATION:
Enter into an agreement with MWDOC to participate in Water Budget Based Tiered
Rate Grant Program.
FUNDING REQUIREMENTS:
There is no fiscal impact related to this item.
DISCUSSION:
In October, 2009, MWDOC secured a Grant provided by the California DWR. The
Grant was made available by DWR to assist in financing a water conservation project,
pursuant to the California Proposition 50, the Water Security, Clean Drinking Water,
Coastal and Beach Protection Act of 2002.
The DWR Grant provides criteria for eligible project costs. MWDOC compiled these
requirements and developed the following three phase approach (although not all
agencies will participate in every phase or order):
1. Water Rate Development
2. Use of Parcel Data for Water Budget Development
3. Billing and Accounting System Needs (hardware and software)
Agreement for Participation in Water Budget Based Tiered Rate Grant Program
April 10, 2012
Page 2
0
In October 2009 the project started with agencies participating in digital mapping, which
is part of phase two, however, the City of Newport Beach did not participate, since the
City already has in place an extensive Geographic Information System (GIS) and
completed parcel data for our City parks and medians.
Due to economic issues, DWR froze the grant in 2010. When DWR resumed the grant,
participants were allowed to go back to October 14, 2008, to capture matching costs
expended after that date. Therefore, the MWDOC /DWR contract includes a one year
extension that will expire in May 2012.
The City contracted with RedOak Consulting in 2009, to conduct a rate study and
prepare a five year financial plan, as well as a feasibility study of implementing a water
budget. Part of that study was to investigate the City's billing system. The funds
expended for work done by RedOak in 2009, qualify the City for phase three and are
reimbursable from the grant.
There is no further funding needed to comply with phase three. Entering into this
agreement will enable MWDOC to reimburse the City $34,000. The City will be
responsible for providing a short summary of the project, findings and outcomes.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act ( "CEQX) pursuant to Sections 15060(c)(2) (the activity will
not result in a direct or reasonably foreseeable indirect physical change in the
environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378)
of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it
has no potential for resulting in physical change to the environment, directly or
indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
Submitted by: / / //
Mark Harmon /
Municipal Operations Department Director
City of Newport Beach
Agreement for Participation in Water Budget
Based Tiered Rate Grant Program
11 -03 -2011
Agreement for Participation in Water Budget
Based Tiered Rate Grant Program
THIS AGREEMENT ( "Agreement'), dated this day of
2012, is made between the Municipal Water District of'Orange County ( MWDOC) and
the City of Newport Beach, a California Municipal Corporation and Charter City ('City" or
"Party" herein) for the purpose of ensuring participation and local match funding under a
grant program for developing and implementing water budget based tiered rate
structures. The City will be participating in the program along with other cities and water
agencies served by MWDOC ('Participants" herein).
Recitals
WHEREAS, the State of California is experiencing a water supply crisis due to a
variety of factors, including naturally occurring drought conditions and judicial orders for
decreased water deliveries to Southern California from the State Water Project; and
WHEREAS, water conservation in the form of budget based tiered rates is a
proven method of water conservation and an important'additional conservation measure
that should be considered by all water providers; and
WHEREAS, the investment in technology and manpower required to develop and
implement a water budget based tiered rate structure is significant, and pooling the
resources of numerous cities and agencies will enhance efficiency and allow economies
of scale; and
WHEREAS, MWDOC and a number of its retail agency customers submitted a
Grant Proposal to the California Department of Water Resources proposing to examine
the costs, issues and water savings associated with implementation of Budget Based
Tiered Rates for Water Management and Droughts (Grant Study); and
WHEREAS, the California Department of Water Resources approved the Grant
Study proposal and awarded $685,000 in grant funds (DWR Grant) to MWDOC to cover
a substantial portion of an overall program with an estimated total cost of $2,390,695;
and
WHEREAS, the City is a MWDOC retail customer that has agreed to participate
in the Grant Study, and
1
Agreement for Participation in Water Budget Based Tiered Rate Grant Program
April 10, 2012
Page 3
Attachment A
Agreement for Participation in Water Budget Based Tiered Rate Grant Program
Note: Attachments A through E are available at the City Clerk's office upon request
..ity of Newport Beach
Agreement for Participation in Water Budget
Based Tiered Rate Grant Program
11 -03 -2011
WHEREAS, MWDOC has already entered into an agreement with DWR
(attached hereto as Attachment A and incorporated herein by reference) that
establishes the rights and obligations of MWDOC and any Participants under the DWR
Grant, including reports and local match requirements; and
WHEREAS, MWDOC and the City further require the Agreement set forth herein
in order to ensure compliance with the DWR Grant, establish a scope of work for the
Grant Study, set a schedule, outline their respective rights and obligations, and
establish cost allocation principles for how the Grant funding will be shared among the
Participants; and
WHEREAS, certain elements of the Grant Study require the assistance of an
outside consultant, Red Oak which shall be retained by MWDOC or the individual
Participants, as provided herein.
NOW THEREFORE, MWDOC and the City agree as follows:
1. PROJECT OVERVIEW
The purpose of the Grant Study is to assist a number of MWDOC's retail water
agencies in examining various aspects of water budget rate structures, including the
feasibility, approach and implementation of water budget rate structures. The Grant
Study will be conducted in three phases, although not every Participant will participate
in every phase. The phases are:
Phase 1: Water Rate Development
Phase 2: Use of Parcel Data for Water Budget Development
Phase 3: Billing and Accounting System Needs (hardware and software)
As Grantee under the DWR Grant, MWDOC will work with the Participants in a
group setting from time to time to discuss elements of all three phases. In addition,
separate meetings between MWDOC and the individual Participants will focus in greater
detail on the policy and technical issues associated with water budgets. Individual
Participant meetings will be held with the appropriate policy- makers and senior staff to
receive input on the type of water budget best suited for each Participant. In addition, a
billing system compatibility analysis will be conducted and different implementation
options will be provided for each Participant in that phase of the study.
The Grant Study will also outline the financial and political aspects of water
budgets and will position the retail agencies to implement water budgets for equitable
allocation of water under a continuing rationing scenario. The main goal of the Grant
Study is to help urban communities cope with water shortages and drought conditions,
but the water management benefits of a water budget based rate structure will continue
City of Newport Beach
Agreement for Participation in Water Budget
Based Tiered Rate Grant Program
11 -03 -2011
to accrue each and every year. Equitable allocation of indoor and outdoor water needs
by account will allow the Participants to determine quickly and accurately which
accounts are over their allotment. Based on this information, a water purveyor can
focus its resources on saving water from these accounts based on price and /or other
complementary device -based conservation programs. In this manner, the flexibility of
water budgets makes them the most equitable mechanism for water conservation.
Agencies with sewer rates based on water consumption will also benefit by the
reduction in treatment costs. All legal issues, including compliance with the California
Environmental Quality Act (CEQA), will be handled by the individual Participants
through their own legal counsel. Legal costs so incurred can be used as local matching
funds. MWDOC has taken the position that for purposes of the Grant Study, no action
by MWDOC is required for CEQA compliance. An independent CEQA determination
should be made by each Participant pursuant to advice from its legal counsel:
2. CONSULTING CONTRACTS (PHASES 1 AND 3)
To secure the required expertise and assistance in rate making, rate modeling
and implementation of budget based tiered rates, the Participants and MWDOC
conducted a selection and due diligence process to identify consultants to be hired by
MWDOC. This process included (1) collecting information about qualifications of
potential consultants from Participants, (2) working with Participants to identify and
complete due diligence to establish qualifications for potential consultants, (3) MWDOC
soliciting Statements of Qualifications from a number of consultants and selecting the
consultants to be hired directly by MWDOC, and (4) Participants reviewing and hiring
consultants based on their own administrative procedures. At all times MWDOC
advised the Participants that they were free to utilize consultants selected by
Participants or others with whom Participants have already worked on related activities.
This multi - pronged process to establish and evaluate qualifications resulted in a
consensus for MWDOC to hire Raftelis Financial Consultants for the Phase 1 Water
Rate Development and Red Oak Consulting for Phase 3 Billing and Accounting System
Needs. This process included input from Participants who were already working with
Raftelis and Red Oak on related activities.
Pursuant to these efforts, the Participants directed MWDOC to enter into
agreements with both Raftelis Financial Consultants and Red Oak Consulting, a division
of Malcolm Pirnie, to make consulting services available in support of the Grant Study.
Shown below is a table indicating which agencies will be hiring their own consultants
and which ones will be utilizing the MWDOC retained consultants.
3
. ity of Newport Beach
Agreement for Participation in Water Budget
Based Tiered Rate Grant Program
11 -03 -2011
Use of Consultants for DWR
Budget Based Tiered Water Rates
Phase 2
Phase 3
Digital
Phase 1 Rate
IT Hardware
Participant
Mapping
Structure
Software
1. Garden Grove
Yes
2. Buena Park
Own*
Own*
3. Yorba Linda WD
Raftelis
Own*
4. South Coast WD
Yes
Raftelis
Own*
5. El Toro WD
Yes
Raftelis
Own*
RedOakvia
6. Huntington Beach
Raftelis
MWDOC
7. Moulton Niguel
Yes
RedOak
Own*
8. SMWD
Yes
Redoakvia
9. Newport Beach
MWDOC
10. San Juan Capistrano
Yes
11. East Orange County WD
Yes
Raftelis
Own*
12. Mesa Consolidated WD
Yes
13. Fountain Valley
Own*
Raftelis for
Management
14. MWDOC
of Grant
hired by
MWDOC
* "Own" indicates the Participant will retain its own consultant
The Grant Study approved by DWR requires completion of ten (10) tasks, as
described more fully in Section 4 below. Each task requires certain activities by
MWDOC as the Grantee and certain activities by one or more of the Participants,
depending on which of them are participating in a particular task.
For completion of the Study Tasks., MWDOC's responsibilities include:
a. Management and administration of consulting service proposal. with Raftelis
Financial Consultants (attached hereto as Attachment B and incorporated
herein by reference).
51
City of Newport Beach
Agreement for Participation in Water Budget
Based Tiered Rate Grant Program
11 -03 -2011
Management, facilitation and administration of the Grant Study process with
the Participants, including the tracking, monitoring and reporting of in -kind
contributions.
c. Invoicing the Participants, pursuant to this and other agreements, and paying
the consultants hired by MWDOC.
d. Administration of the DWR Grant agreement (attached hereto as Attachment
A and incorporated herein by reference), including tracking local contributions
toward the local match amount and working with the Participants to ensure to
the fullest extent possible that all DWR funds are utilized.
For completion of the Study Tasks, the City's responsibilities include:
a. Participate and cooperate with MWDOC, other Grant Study Participants and
all consultants hired for the Grant Study, including by responding to
information requests on a timely basis.
b. Attendance at workshop meetings.
c. Assigning staff to attend individual meetings with Grant Study consultants.
d. Keeping accurate and complete records of in -kind contributions to submit for
credit toward the Participant's local match amount, which can include direct
payments for services related to any aspect of the Grant Study, the value of
staff time expended in furtherance of the Grant Study, legal fees and costs
incurred in connection with participation in the Grant Study, and other fees
and costs for consultants hired in connection with participation in the Grant
Study, if any.
e. Taking all reasonable steps available to maximize all local match
opportunities so that the full amount of the grant from DWR can be utilized.
The Participants are collectively responsible for providing an overall local
contribution of 71 % of the full cost of the Grant Study. The Party hereby
acknowledges that if the local contribution falls below 71 % of the full cost of
the Grant Study, DWR will reduce its contribution so as to maintain a 29%
share and funds otherwise available under the DWR Grant will not be
available for the Grant Study. MWDOC will work with the Participants,
individually and collectively, to ensure that all DWR funds are utilized to the
maximum extent possible.
f. The City contracted with Red Oak Consulting (Attachment C) in December
2009, thereby satisfying Task 6 below -- assessing Billing and Accounting
System Needs. This contract was in the amount of $88,177.00. MWDOC and
the City anticipate that the MWDOC Grant will reimburse the City $34,000.00
for this portion of the work. In fulfillment of this requirement, the City will be
responsible for providing a short summary of the project objectives, findings
and outcomes.
5
amity of Newport Beach
Agreement for Participation in Water Budget
Based Tiered Rate Grant Program
11 -03 -2011
3. DIGITAL MAP PRODUCTS (DMP) CONTRACT (PHASE 2)
The City of Newport Beach elects to opt out of Phase 2. The City will provide its own
digital mapping.
4. TEN TASKS OF THE GRANT STUDY
The ten tasks required by the Grant Study are standard tasks based on the
American Water Works Association Rates and Charges Manual, which is the industry
standard for water rate setting.
Task 1: General Administration and Report Preparation for All Agencies.
Task 1 includes general administration and coordination among the Participants and
consultants; quarterly progress report preparation and invoicing are included, as is a
joint agency kickoff meeting to be held at the commencement of the Grant Study.
MWDOC staff will be facilitating and managing the Grant Study on behalf of all of the
Participants.
Task 2: Identify Cost and Agency Revenue Requirements
Task 2 involves identification of annual cash requirements to pay for the associated
costs of maintaining water agency operations, while still meeting debt coverage ratio
and reserve requirements. Each Participant in the Water Rate Development process will
complete this task on their own.
Task 3: Cost of Service Analysis
MWDOC will conduct a workshop with the Participants in the Water Rate Development
Process to provide information and background on how to conduct a cost of service
analysis. Individual Participants will develop details on customer classes and fixed
versus variable costs
Task 4: Develop Rate Structure and Water Budgets
Another workshop will be held with the Participants in the Water Rate Development
Process to discuss Rate Structures and Water Budgets, including the following three
topics or subtasks:
a. Policy Factors for Indoor / Outdoor Allocation — Develop policy options
associated with indoor and outdoor water allocations. These policy options
will serve as the foundation for developing water budgets.
b. Development of Water Budget Database — Based on the policy option
developed in the above task, each retail agency will develop the appropriate
allocation factor for each account. MWDOC will utilize Newport Beach
mapping estimates of irrigable area for each parcel. These estimates will be
developed based on calculations and parcel data from the Assessor's Office
and infrared map overlays that will identify estimated irrigation areas for each
City of Newport Beach
Agreement for Participation in Water Budget
Based Tiered Rate Grant Program
11 -03 -2011
parcel. This information will be incorporated into a water budget database
that will allow formulation of a monthly water budget for each parcel.
c. Model Development and Testing — Utilizing the water budget database as
one of the model drivers, each agency will develop a water budget model to
populate with data for their agency. The water budget models will provide
Participants with an ability to conduct "what if' scenarios. The models will
perform: 1) fixed /variable rate adjustment, 2) water budget allocation, 3)
revenue analysis, and 4) typical monthly bills comparisons.
Task 5: Legal Input — Proposition 218 Compliance
The City shall have its own attorney provide input and advice on water budget based
rates and compliance with provisions of Proposition 218. The indemnification of
MWDOC and the State set forth below in this Agreement expressly includes, without
limitation, any administrative or legal action .related to Proposition 218.
Task 6: Billing and Accounting System Needs and Options
To support the implementation of the water budget based rate structure, the Phase 3
work will include an assessment of current customer service and billing practices and a
review of the information systems used for Customer Information and Billing purposes.
The ability of the current system will be compared with new requirements for handling
budget based tiered rates and a gap analysis report will be prepared. This report will
make recommendations for either a change in procedures or a change in systems and
will provide suggested tasks, a schedule and an estimate of costs. Implementation of
any billing or information system changes will be the responsibility of the City.
Task 7: Outreach
MWDOC and the Participants will develop generalized information templates for use by
Participant's moving into implementation. Each individual Participant will then develop
specific outreach materials and a tailored approach for its own use. The main goal of
this task is to educate the public on the benefits associated with water budgets and how
they function.
Task 8: Implementation of Budget Based Tiered Rates
MWDOC and its consultants hired as provided herein will be available to attend Board
of Directors or City Council meetings and will develop presentation templates outlining
options for generalized customer support. Individual Participants are responsible for all
implementation phases and customer support within their service areas.
Task 9: Final Report
MWDOC, with the assistance of its consultants and each Participant, will develop
individual reports that summarize the activities, findings and conclusions for each
Participant. These reports will discuss the individual budget allocation used and the
expected savings to be achieved. An overall report summarizing the results will be
prepared for submittal to DWR and will be available to the Participants.
.;ity of Newport Beach
Agreement for Participation in Water Budget
Based Tiered Rate Grant Program
11 -03 -2011
Task 10: Monitoring and Evaluation
After the completion and submittal of the final report, MWDOC and each Participant will
be responsible for conducting annual monitoring and evaluation reports to determine
actual savings from this project. MWDOC will summarize the analysis for DWR.
5. SCHEDULE
The general schedule for the Grant Study is outlined below. Based on the State
freezing and restarting the grant, DWR will allow MWDOC and the Participants to go
back to October 14, 2008 to capture matching costs expended after that date. The
Digital Mapping effort began in October 2009. The DWR Contract, including the one -
year extension, extends through May 15, 2012. Following is the estimated task
schedule, assuming a start date of March 15, 2010:
[INTENTIONALLY LEFT BLANK]
1:3
Budgets Based-Tiered Rate Grant Schedule
Work
Phase
Code'
Item
Timing
IT
1. Workshop on IT, Billing, Software
March 15, 2010
DM
2. Delivery of 2009 Digital Mapping Data
March 15, 2010
DM
3. Training on LandVision by Digital Maps
March — April
2010
WR
4. Workshop on Water Rate Structures
May 2010
(estimated)
IT
5. Workshop with Potential Software Vendors (may be
combined with other activities)
May /June
(estimated)
6. Finalize Agreements with Agencies & Consultants (Notice
to Proceed)
June, 2010
(estimated)
PR
7. First Progress Report to DWR
July 2010
IT
8. Complete Initial Assessment on IT, Billing, Software
September 2010
PR
9. Second Progress Report to DWR
October 2010
IT
10. Initiate Detailed IT, Billing, Software — where required
November 2010
WR
11. Complete Primary Work on Water Rate Structures
January 2011
PR
12. Third Progress Report to DWR
January 2011
PR
13. Fourth Progress Report to DWR
April 2011
IT
14. Complete detailed IT, Billing, Software — where required
July 2011
WR
15. Agencies moving to implementation - complete and
implement all work on Rate Structures
January 2012
PR
16. Fifth Progress Report to DWR
July 2011
17. Complete all work with Agencies on all Phases
January 2012
PR
18. Sixth Progress Report to DWR
October 2011
PR
19. Final Progress Report to DWR
January 2012
20. Begin Five Year Monitoring Program
January 2012
21. DWR Agreement End Date
May 2012
` Work Phase Code:
IT = IT, Billing, Software activities
DM = Digital Mapping activities
WR = Water Rate Structure activities
PR = Progress reporting activities
0
6. DELIVERABLES
MWDOC will submit the quarterly reports to DWR documenting progress, task
completion, and project success, the "Draft Final Report" due at Agreement end date,
the "Final Report" due approximately one month following the Agreement end date, and
"Annual Updates on Benefits & Costs" for 5 consecutive years following completion of
the Grant Study. The projected benefits will be validated through data analysis.
In addition to the deliverables required by DWR, MWDOC will also submit to
DWR the "Rate Structure Recommendations Reports" and 'Billing and Accounting
System Needs and Options Reports' (one each per participating agency).
7. PHASES OF PROJECT PARTICIPATION
The Participants will participate in their choice of a three Phase Grant Study and will
receive a share of the grant funds based on their participation in the chosen Phase as
outlined in Attachment D and incorporated herein by this reference.
8. GRANT SHARING
Attachment A provides the basis for sharing in the grant funds from DWR. The
conditions for receipt of Grant Funds by the Participants includes:
• Must provide 71 % local funds or in -kind services to receive up to 29%
grant funds, up to max in Attachment D.
• Grant funds shown in Attachment D cannot be exceeded unless other
Participants do not use all of the grant funds they were allocated.
• Participants may utilize excess matching funds from other Participants
toward their own local match, if the funds are available for that purpose.
9. OUTREACH, COMMUNITY INVOLVEMENT, AND ACCEPTANCE
Outreach and community involvement activities (see Task 7) are an important
component of the Grant Study, especially for any Participant proceeding into full
implementation of budget based tiered rates. Outreach will begin when needed by an
agency and extend through adoption and implementation of the rate structure.
The Participants and their consultants shall include appropriate
acknowledgement of credit to the State of California, Department of Water Resources
and to all cost - sharing partners for their support when promoting the Grant Study or
using any data and /or information developed under the Agreement.
10
10. BUDGET
The total cost for the Grant Study is $2,390,695. The total DWR Grant amount
awarded is $685,000, subject to Participants' local matching share of $1,705,695, or
71 % of the total amount. Refer to section 2f for the City of Newport Beach anticipated
reimbursement amount.
11. COST SHARING
Attachment D provides the basis.for sharing in the grant funds from DWR.
MWDOC will monitor and track the level of expenditures for each Participant. The goal
is to complete the work with the highest quality and lowest cost possible and with a
percentage local match of 71 % or greater.
12.INVOICING
For other consultants hired by MWDOC, invoices shall be sent to the agencies
on a quarterly basis concurrently with MWDOC's quarterly invoices to the State.
Payments for consultants hired directly by the City are the responsibility of the City.
Reports on payments made directly by the City for costs incurred for staffing and other
internal costs shall be submitted to MWDOC on a quarterly basis.
13. INDEMNIFICATION AND HOLD HARMLESS
a. General: Each Party agrees to indemnify, defend at its own expense,
including attorneys' fees, and hold each other Party harmless from and
against all claims, costs, penalties, causes of action, demands, losses and
liability of any nature whatsoever, including but not limited to liability for bodily
injury, sickness, disease or death, property damage (including loss of use) or
violation of law, caused by or arising out of or related to any negligent act,
error or omission, or willful misconduct of that indemnifying Party, its officers
or employees, or any other agent acting pursuant to its control in the
performance of this Agreement.
b. As to MWDOC: Each Participant agrees to indemnify and defend at its own
expense, including attorneys' fees, and hold MWDOC harmless from and
against all claims, costs, penalties, causes of action, demands, losses and
liability of any nature whatsoever related to an administrative or legal
challenge to such Participant's action, or inaction, with respect to a water
budget based rate structure.
c. As to State: MWDOC and each Participant agrees to indemnify the State
and its officers, agents, and employees against and to hold the same free and
harmless from any and all claims, demands, damages, losses, costs,
11
expenses, or liability due or incident to, either in whole or in part, and whether
directly or indirectly, arising out of the Grant Study.
14. INSPECTIONS BY STATE
The State of California, acting by and through the Department of Water
Resources, shall have the right to inspect the work being performed by the Participants
at any and all reasonable times during the term of the Agreement. This right was
established as to MWDOC in the DWR Grant agreement, and by express requirement it
must be extended by MWDOC to this Agreement and all Participants.
15.WORKERS' COMPENSATION CLAUSE
Each Participant affirms that it is aware of the provisions of Section 3700 of the
California Labor Code, which require every employer to be insured against liability for
workers' compensation or to undertake self - insurance in accordance with the provisions
of that code, and each Participant affirms that it will comply with such provisions before
commencing the performance of the work under this Agreement and will make its
contractors and subcontractors aware of this provision.
16.AMERICANS WITH DISABILITIES ACT
By signing this Agreement, each Participant affirms that it complies with the
Americans with Disabilities Act (ADA) of 1990, (42 U.S.C. 12101 et seq.), which
prohibits discrimination on the basis of disability, as well as all applicable regulations
and guidelines issued pursuant to the ADA.
r
17. DRUG -FREE WORKPLACE CERTIFICATION OF COMPLIANCE
By signing this Agreement, each Participant certifies that it has a drug -free
workplace program that meets the requirements of Government Code 8350 et seq. with
respect to employees who may work directly in the expenditure of grant funds. )
MWDOC's Drug and Alcohol Free Workplace Program is attached as
Attachment E and incorporated herein by reference, and MWDOC shall implement its
program as required in connection with administration of the DWR Grant.
12
18. NON DISCRIMNATION CLAUSE
During the performance of this Agreement, the Participants shall not deny the
Agreement's benefits to any person on the basis of religion, color, ethnic group
identification, sex, age, physical or mental disability, nor shall they discriminate
unlawfully against any employee or applicant for employment because of race, religion,
color, national origin, ancestry, physical handicap, mental disability, medical condition,
marital status, age, or sex. The Participants shall insure that the evaluation and
treatment of employees and applicants for employment are free of such discrimination.
The Participants shall comply with the provisions of the Fair Employment and
Housing Act (Government Code, Section 12900 et seq.), the regulations promulgated
thereunder (California Code of Regulations, Title 2, Section 7285.0 et seq.), the
provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code
(Government Code, Sections 11135 - 11139.5) and the regulations or standards adopted
by DWR to implement such article.
The Participants shall give written notice of their obligations under this clause to
labor organizations with which they have a collective bargaining or other agreement.
The Participants shall include the nondiscrimination and compliance provisions of
this clause in all contracts and subcontracts to perform work under the Agreement.
The Participants' signatures on this Agreement shall constitute a certification that
each signing Participant has, unless exempted, complied with the nondiscrimination
program requirements of Government Code, Section 12990, and Title 2, California
Code of Regulations, Section 8103.
19. TERM
Unless terminated earlier as provided in this section, the term of this Agreement
shall run concurrently with the term of the agreement between MWDOC and DWR,
which extends through May 15, 2012. Alternatively, this Agreement runs until
completion and payment of all costs of all Phases of the Project or until termination of
the DWR Contract, whichever occurs earlier, unless the Agreement is terminated earlier
by a majority of the Participants pursuant to Section 26 below. This Agreement may be
modified by written agreement of MWDOC and the City, including modification to extend
the term to be made consistent with any extensions provided by DWR for its contract.
Pursuant to the DWR Grant agreement, the Project is considered to be completed or
terminated for purposes of the DWR Grant only when so determined by DWR.
20. NOTICE
Any notice, invoice, payment made pursuant to this Agreement shall be sent to
MWDOC and the City at the address shown below.
13
City of Newport Beach
City of Newport Beach
P.O. Box 1768
Newport Beach, CA 92663
ATTN: Dave Kiff, City Manager
MWDOC
Municipal Water District of Orange County
18700 Ward St.
P.O. Box 20895
Fountain Valley, CA 92728
ATTN: Kevin P. Hunt
MWDOC and the City may change their addresses for this purpose by giving
written notice to the other as provided herein.
21.TIMELINESS
Time is of the essence in this Agreement.
22.AMENDMENTS
The Agreement may be amended at any time by mutual agreement of all parties
set forth in a written instrument and executed by all MWDOC and the City.
21ASSIGNMENT
No party may assign or otherwise assign or transfer any rights, interests or
obligations under this Agreement without the written consent of all parties. Once an
assignment or transfer occurs with such consent, this Agreement and all of its
provisions shall apply to and bind the successors and assigns of the parties.
24.SEVERABILITY
The partial or total invalidity of one or more provisions of this Agreement will not
invalidate the remaining provisions.
25. GOVERNING LAW
This Agreement is governed by and shall be interpreted in accordance with the
laws of the State of California. Venue for any action filed by any party or parties related
to this Agreement shall be Orange County, California.
26.TERMINATION OF AGREEMENT
This Agreement may be terminated by MWDOC or the City by action of their
respective governing boards or councils. Upon termination, each shall remain
14
responsible for its share of costs up to the time of termination, as well as reasonable
close -out costs, if any.
27. COUNTERPARTS
This Agreement and any amendment hereto may be executed in two or more
counterparts, and by each party on a separate counterpart, each of which, when
executed and delivered, shall be an original and all of which together shall constitute
one instrument, with the same force and effect as though all signatures appeared on a
single document.
28.SIGNATURES
The individuals executing this Agreement represent and warrant that they have
the legal capacity and authority to do so on behalf of their respective agencies.
IN WITNESS WHEREOF, the MWDOC and the City have executed this Agreement as
of the date below.
rr,_)
Date
Date
By i
By
Kevin . Hunt
City of Newport Beach
General Manager
Nancy Gardner
MWDOC
Mayor
Approved as to Form:
Approved as to Form:
Date ii)� -i 2
Date I Zn/o
By:
I
By:
Aaron Harp
Russell G. Behrens
Daniel J. Payne
City Attorney
General Counsel
Attest:
Date
By
'Leilani I. Brown
City Clerk
15
f: J.
Attachment A = DWR Grant Contract
Attachment B = Raftelis Financial Consultants Proposal for MWDOC
Attachment C = Red Oak Consulting Proposals for Newport Beach
Attachment D = Grant Sharing Summary
Attachment E = MWDOC Drug and Alcohol Free Workplace Program
i[:1
Attachment A
DWR Grant Contract
iWA
STATE OF CALIFORNIA- THE RESOURCES AGENCY ARNOLD SCHWARZENEGGER,Govemor
DEPARTMENT OF WATER RESOURCES
16 NINTH STREET, P.O. BOX 942836
.NCRAMENTO, CA 942360001
(916( 65 3-5791 0
00 do 4MW
October 5, 2009
60026 0 130
(13A13038
Mr. Kevin P. Hunt
General Manager
Municipal Water District of Orange County
18700 Ward Street
Fountain Valley, California 92708
Dear Mr. Hunt:
Enclosed is your fully executed copy of Proposition 50 Water Use Efficiency Drought
Grant Agreement 4600008312 for the Budget Based Rates in Orange County for Water
Management and Droughts PPoject. Please use your letterhead when you send
invoices to the Department of Water Resources. Also, make reference to the
agreement number, to whom the check should be made payable, and where it should
be mailed.
If you have any questions regarding the processing of your invoices; please contact me.
Sincerely,
Lisa tiste
Grants Coordinator
(916) 651 -7039
Enclosures
o „
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
STATE OF CALIFORNIA
THE RESOURCES AGENCY
DEPARTMENT OF WATER RESOURCES
AGREEMENT BETWEEN THE STATE OF CALIFORNIA
DEPARTMENT OF WATER. RESOURCES
AND
MUNICIPAL WATER DISTRICT OF ORANGE COUNTY
FOR URBAN DROUGHT ASSISTANCE GRANT UNDER
PROPOSITION 50'T HE WATER SECURITY, CLEAN DRINKING WATER,
COASTAL AND BEACH PROTECTION ACT OF 2002
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates. in Orange County
for Water Management and Droughts'
Drought Grant
This agreement is entered into between the State of California, acting by and through
the Department of Water Resources, (State) and the Municipal Water. District of Orange
County, (Grantee).
The State and Grantee agree as follows:
SECTION I PURPOSE OF GRANT
This State Grant is -made by the State to the Grantee to assist in financing a Water
Conservation Project pursuant.to the California Proposition 50, the Water Security,
Clean Drinking Water, Coastal and Beach - Protection Act of.2002. This Grant program
implements Water Code Chapter 7, Section 79550(g) of Proposition 50.
Grant funds may be used only as,provided in this Agreement for such Eligible Project
Costs' as set forth in the Project description and Budget, copies of which are
incoiporated ' herein as reference. - Exhibit B, "Statement of Work" and Exhibit C,
"Budget" which describe tasks to be accomplished and costs associated with those
tasks under this Agreement
SECTION 2 TERM OF STATE GRANT
The term of this Agreement shall be for two years from the date of execution.
SECTION 3 PROJECT COSTS
The Total Project Costs (identified in Exhibit C) are estimated to be $2,390,695.00.
SECTION 4 STATE GRANT
Subject to the availability of funds, the State will grant to the Grantee in accordance with
the terms of this Agreement an amount 'not to exceed $685,000.00, as State Share, as
identified in Exhibit d, for Eligible Project Costs.
SECTION 5 GRANTEE'S COST SHARE AMOUNT
The Grantee agrees to fund the difference,-if any, between the estimated'Project Cost
(Section 3) and the State.Grant (Section 4). Grantee's Costs are estimated to be
$1,705,695.00, as identified in Exhibit C.
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
SECTION 6 INCORPORATION OF STANDARD CONDITIONS AND GRANTEE
'COMMITMENTS
In addition to Exhibits B and C, this agreement incorporates Exhibit A, "Standard
Terms ". The Grantee accepts and. agrees to comply with all terms, provisions,
conditions, and commitments 'of this Agreement, including all incorporated documents,
and to fulfill all assurances, declarations, representations and statements made by the
Graritee in the Application, documents, amendments and communications filed in
support of its request for financing.
SECTION 7 CONDITIONS FOR DISBURSEMENT
The Grantee shall meet all conditions for disbursement of money under this Agreement,
.including the provisions of Exhibit A-6. Failure by Grantee to comply may, at the option
of the State, result in termination of the Agreement:
SECTION 8 PROGRESS REPORTS AND STATEMENT OF: COSTS
The Grantee shall submit quarterly progress reports, starting 3 months after date of
execution, oi• as detailed in the Exhibit B; B7 "Schedule of Progress Reports and
Payments" on the status of the Project and a Statement of Costs to the Department of
Water Resources. The submittal and approval by the. State of these reports is a
requirement for continued disburseent of State Grant funds. Progress reports shall
summarize the work completed du mring the reporting period; include a statement of
- progress — toward— cdmpletion— compared —to ttie Project sc a ule, and provide a
comparison of costs to date compared to the approved scope of work and Project
budget. Quarterly Reports will follow the format requirements set forth in Exhibit B;
Attachment 1.
SECTION 9 FINAL REPORTS.
The Grantee shall submit a Draft.Final Report on Project completion or termination and
expenditures for the State's review and comment. , The Draft Final. Report shall be
modified to incorporate the State's comments, if any, and resubmitted, as Final Report
within sixty (60) days of the Grantee's receipt of'the State's comments. The Grantee
shall also submit Post - Completion Annual Reports and updates. Reporting will follow
thefionnat requirements set in Exhibit B, Attachments 2 and 3.
_. I
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rafes in Orange County
for Water Management and Droughts
Drought Grant
SECTION 1D OPERATIONS AND MAINTENANCE OF "CONSTRUCTION" PROJECT
In consideration of the State Grant, the Grantee agrees, for the useful life of the Project
to expeditiously commence and to continue operation of the Project and shall cause the
Project to be operated in an efficient and economical manner; shall provide for all
repairs, renewals, and replacements necessary to the efficient operation_ of the Project;
and shall cause the Project to be maintained in as good and efficient condition as upon
its construction, ordinary and reasonable wear and depreciation excepted. Refusal of
the Grantee to operate and maintain the Project in accordance with this provision may,
at the option of the State, be considered a material breach of Agreement and may be
treated as default under default provisions Exhibit-A-25.
SECTION 11 RELATIONSHIPS OF PARTIES
The Grantee, its contractors, subcontractors, and their respective agents and
employees required for performing any' work under this Agreement shall act in an,
independent capacity and not as officers, employees, or agents of the State.
The Grantee is solely responsible for planning and implementation of the Project.
Review or approval of plans, specifications, bid documents or other construction
documents by the State is solely for the purpose of proper administration of State Grant
funds and shall not be deemed to relieve or restrict the Grantee's responsibility.
SECTION 12 PERMITS, LICENSES, APPROVALS AND LEGAL OBLIGATIONS
The Grantee shall be responsible , for obtaining any and all permits, licenses and
approvals required for performing any work under this Agreement, including .those
necessary for planning and implementing the Project. The Grantee shall be responsible
for complying with all applicable federal, State and local laws, rules or regulations
affecting any such work; specifically including, but not limited to, environmental, labor,
procurement and safety laws, rules, regulations and ordinances:
SECTION 13 GRANTEE'S RESPONSIBILITIES FOR WORK
The Grantee shall be responsible for work, and for persons or entities engaged in work,
including, but not limited to, subcontractors, suppliers and providers of services.. The
Grantee shall give personal supervision to any work required under this Agreement or
employ a competent representative, satisfactory to the State, with the authority to act for
the Grantee. The Grantee or its authorized representative shall be present while work
is in progress: The Grantee'shall be responsible for any and "all disputes arising out of
its contracts for work on' the Project, including but not limited to bid disputes and
payment disputes with the-Grantee's contractors and subcontractors. The State will not
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
mediate disputes between the Grantee and any other entity concerning responsibility for
performance of work.
SECTION 14 PROJECT OFFICIALS AND NOTICES
The Chief, Office of Water Use Efficiency and Transfers, Department of Water
Resources shall be the State's representative and shall have the authority to sign
Agreement and amendments to'the Agreement if needed, and to make determinations
with respect to each controversy or discrepancy arising under or in connection with the
interpretation, performance; or payment for work performed under this Agreement. .
The Grantee Project Director shall be Kevin P. Hunt. The Grantee Project Director shall
be the Grantee's representative for the administration of the Agreement and shall have
full authority to act on behalf of the Grantee, including authority to execute all payment
requests. All communications given to the Project Director shall be as binding as. if
given to the Grantee.
Either party may change its representative upon written notice to the other party.
Notices required to be given to the State in writing by the Grantee under this Agreement
shall'be sent to:
Baryohay Davidoff,.Manager
Water Use Efficiency Grant Program
State of California
Department of Water Resources
Office of Water Use Efficiency and Transfers
901 P Street, Room 313A
Post'Office Box 942836
Sacramento, CA 94236 -0001
Notices required to be given_ to the Grantee in writing by the State under this Agreement
shall be sent to:
Kevin P. Hunt, General Manager.
Municipal :Water District of Orange County
P. -O. Box 20895
Fountain Valley, CA 92728
A change of address for delivery or notice may be made by either party by written notice
of such'change. of address to the other party.
All such notices shall be enclosed in a properly addressed, postage prepaid• envelope
and deposited in a, United States Post Office for delivery by registered or certified mail.
. Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
Approved as to Legal Form and Sufficiency:
By Do�
David A. Sandino, ief Counsel Da e
Department of Water Resources
STATE OF CALIFORNIA
DEPARTMENT OF WATER
MUNICIPAL WATER DISTRICT OF ORANGE
COUNTY
Approved as to Legal Form and Sufficiency:
By
Grantee's Attorney (if applicable) Date
By
Signa r)F bates
Kevin P. Hunt;.General Manager
Municipal Water District of Orange County
18700 Ward Street
Fountain Valley, CA 92708
Use Efficiency and
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
Date
N
Agreement 4600006312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
STATE OF CALIFORNIA
THE RESOURCES AGENCY
DEPARTMENT OF WATER RESOURCES
EXHIBIT A
STANDARD TERMS
A -1. GOVERNING LAW: This Agreement is governed by and shall be interpreted in
accordance with the laws of the State of California.
A -2. ' TIMELINESS: Time is of the essence in this Agreement.
A -3. AMENDMENT: This Agreement may be amended at ' any time by mutual
agreement.of the parties, except insofar as any proposed amendments are in
any way contrary to applicable law_ Requests by the Grantee for amendments
must be in writing stating.the amendment request and the reason for the request.
A-4. SUCCESSORS AND ASSIGNS: This Agreement and all of its provisions shall
apply to and bind the successors and assigns. of the, parties hereto. No
assignment or transfer of this'Agreement or any part thereof, rights hereunder, or
interest herein by the Grantee.shall be valid unless and until it is approved by the
State and made subject to such reasonable terms and conditions as the State
may imposer
A -5. ELIGIBLE PROJECT COSTS: Grantee shall apply State Grant funds received
only to Eligible Project Costs, as identified in Exhibit C.
A-6. CONDITIONS FOR DISBURSEMENT: The State shall have no obligation to
disburse money under this Agreement unless and until the Grantee has satisfied
the State that the disbursement is in accordance with the requirements of the
Water Code Chapter (7), Section 79550(g) of Proposition 50, and the following:
(a) For Construction Projects, .the. Grantee submits to- the State, final plans
and specifications certified by a California Registered Civil' Engineer or
equivalent documentapon as to compliance with the approved Project.
(b) The Grantee submits a written statement by an authorized representative
that it has obtained all necessary permits, easements, rights -of -way and
approvals as may be required by other State, federal, and /or local
agencies, as specified in Section'12 of this Agreement.
A -7
Agreement 4600008312
Municipal. Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
(c) The Grantee demonstrates compliance with the California Environmental
Quality Act and the National Environmental Policy Act. by submitting
copies of any environmental documents, including environmental impact
reports, environmental impact statements, negative declarations,
mitigatioh agreements, legal notices and environmental permits as may be
required prior to beginning the Project.
(d) The Grantee submits timely quarterly progress reports, draft final and final
reports, and post - completion annual reports on benefits and costs updates
as required by Sections 8 and 9 of this Agreement.
(e) The 'Grantee 'demonstrates continuing availability of sufficient. funds to
complete the Project.
STATE GRANT DISBURSEMENTS:
(a) Cost Statements: After the Conditions for Disbursement, Section A-6, are
met, the State will disburse the whole or portions of the State Grant
commitment to- the Grantee following' receipt from the Grantee of 'a
statement or statements of incurred Eligible Project Costs, reviewed by
the Grantee's designated representative, and timely progress reports as
required by Section' 8 of this Agreement. Requests for State Grant funds
.shall be filed quarterly or for such periods as the State and the Grantee'
may mutually agree_ The Grantee shall provide the following information:
1. A statement of the incurred .Eligible Project Costs for work
performed under the Agreement during the period identified in the
particular statement and which matches the Budget in Exhibit C
and tasks in Exhibit B.
2. A statement of the cost of any interests in real property (land or
easements) that have been necessarily acquired- for the Project -
during the period identified in the. particular statement for the
implementation of the Project.
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
The Grantee shall submit two (2) copies of quarterly progress
reports and (2) copies of invoice.(along with supporting documents
for expenditures) associated with work accomplished during that
quarter to:
Baryohay Davidoff, Water Use Efficiency Grant Program Manager
Department of Water Resources
Office of Water Use Efficiency and Transfers
901 P Street, Room 313A
P,O. Box 942836
Sacramento, CA 94236 -0001
The invoice must- be .detailed and provide supporting
documentation for both State and Local Share of costs for each
quarterly progress report. Invoice shall be submitted in :arrears,
bearing the Agreement number:
The Grantee must also submit one (1) original copy of each invoice
simultaneously to:
DWR Accounting Office
Contracts Payable Unit
P.O. Box 942836
Sacramento, CA 94236
All reports and invoices must be on the Grantee's letterhead, have
name, project title, Agreement number, invoice number, and the
quarter and tasks for which progress reports and invoices cover.
(b) Disbursement: Following the review and approval of each invoice, the
State will disburse to the Grantee the amount approved, subject to the
availability of funds through the State's normal procedures. Funds will be
disbursed by the State in response to each approved invoice on a pro rata
basis in accordance with the relative payment obligations of the Grantee.,
Sections 3, 4, and 5 of this Agreement. Any and all money disbursed to
the Grantee, under this Agreement and any and all interest•eamed by the
Grantee on such money shall be used solely to pay Eligible Project Costs.
04
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
Along with submittal of Draft and Final Report and satisfactory completion
of the project. Grantee shall submit to the State a final invoice for incurred
Eligible Project Costs .and request release of retention/withholding, as
identified in Exhibit A -8(a) of this agreement.
WITHHOLDING OF GRANT DISBURSEMENTS BY STATE:
(a) Withholding. Clause: The State, at its discretion, may withhold ten percent
(10 %) of the funds requested by the Grantee for reimbursement of eligible
Project Costs until the Project is completed and Final Report is received.
(b). Additional Conditions for Withholding: If the State determines that the
Project is not being completed substantially in accordance with the
provisions of this Agreement or that the Grantee has failed in any other
respect to comply substantially with. the provisions-of this Agreement, and
If the Grantee does not remedy any such failure.to the State's satisfaction,
the State may withhold from the Grantee all or any portion of the State
Grant commitment and take any other action that it deems necessary to
protect its interests_
(c) - Withholding Entire State Grant Commitment: If the State notifies the
Giantee of its decision to withhold all of the State Grant commitment from
the Grantee pursuant to Subdivision (b) of this Article, this Agreement
shall terminate upon receipt of such notice by the Grantee and shall no
longer be binding on either party.
(d) Withholding Balance of State Grant Commitment: Where a portion of the
State Grant commitment has been disbursed to the Grantee and the State
notifies- the Grantee of its decision to withhold the balance of the State
Grant, the portion that has been disbursed shall thereafter be repaid
immediately with interest, as directed by the State.. Refusal of the Grantee
to so repay may, at the option of the State, be considered a material
breach of Agreement and. may be treated as default under Default
Provisions, Exhibit 25.
-A -9. .DOCUMENTATION OF PROJECT BENEFITS AND COSTS: Actual Water
Savings ' and Other Benefits and Costs: The Grantee shall submit Annual
Reports of Benefits and Costs after the first operational year has elapsed and
report any updates and other benefits such as water savings, water quality, flow
and timing, energy_savings, and any other /additional benefits and costs resulting
froni.the Project, as detailed in the Exhibit B (B -2, Benefits). These reports must
be submitted on schedule as identified in Exhibit B (6-7, Schedule for Progress
10
Agreement 4600008312
Municipal Water District of Orange County"
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
Reports and Payments) to the Project Manager. If appropriate, the Grantee shall
revise the estimate of water savings based on records of each consecutive year
for five years. Estimates shall include total annual water_ savings, net annual
water savings, "and costs..The report shall also include a description of how the
water produced by the Project is being utilized. This recording and reporting
process shall be subsequently repeated for a total of five (5) consecutive
operational years. '
A -10, TIMING AND MANNER OF PROJECT UNDERTAKING:
(a) Project Undertaking Pursuant. to Agreement: The Project shall be
undertaken in strict accordancewith this Agreement.
(b) Determination of Project Completion: For the purposes. of this Agreement,
the Project shall be considered to be.completed.or to be terminated when
so determined by the State.
(c) Acknowledgement of Credit: The Grantee shall include appropriate
acknowledgement of credit to the State and to all cost- sharing partners for
their support when promoting the Project or using any data and /or
information developed under the Agreement. .
(d) Audit Requirement: Pursuant to Government Code Section 8546.7, the
contracting parties'shall be subject to the examination and audit of the
State for a .period of ttiree ' (3) years after final payment under this
Agreement with respect to all matters "connected with the performance of
this Agreement, including but not limited to; the cost of administering this
Agreement. All records of the Grantee or subcontractors shall be
preserved for this purpose for at least three (3) years after completion of
the Project.
(e) Competitive Bidding of Contracts and Procurements: Grantee shall
comply with all 'applicable laws and regulations regarding securing
competitive bids and undertaking competitive negotiations in Grantee's
contracts with other entities for acquisition of goods, and services and
construction of public works with funds provided by the State under this
Agreement_
(f) Final Inspection and Certification of Registered Civil Engineer
(Construction Protects): Upon completion of the Project the Grantee shall
provide for a final inspection and certification by a California Registered
Civil Engineer that-the Project has been completed in accordance with
submitted final plans and specifications and any modifications thereto and
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
in accordance with this Agreement. The Grantee shall notify the Office of
Water Use Efficiency and Transfers of the Department of Water
Resources of the inspection date at least 10 days prior to the inspection in
order to provide the. State the opportunity to participate in the inspection.
A -11. ACCOUNTING AND DEPOSIT OF GRANT DISBURSEMENT:
(a) Separate Accounting of State Grant Disbursements and Interest Records:
The Grantee shall account for the money disbursed pursuant to this
Agreement separately from all other Grantee's funds. The Grantee shall
maintain audit and accounting procedures that are in accordance with
generally accepted accounting principles and practices, 'consistently
applied. The Grantee shall keep complete and accurate records of all
receipts, disbursements, and interest earned on expenditures. of such
funds. The' Grantee shalt require its contractors or subcontractors to
maintain books, records, and other documents pertinent to their work in
accordance with generally accepted accounting principles and practices.
Records are subject to inspection by the State. at.any and all reasonable
times... .
(b) Disposition of Money Disbursed: All money disbursed pursuant to this
Agreement shall'.be- deposited, administered, and accounted for pursuant
to the provisiohs -of applicable law. -
(c) Remittance of Unexpended Funds: The Grantee, within a period of thirty
(30) days from the final disbursement from the State to the Grantee of
State Grant funds, shall remit to the State any unexpended funds that
were disbursed to the Grantee under this Agreement and were not heeded
to pay Eligible Project Costs.
(d) Interim and Final Audits: The State reserves the right to conduct an audit
at any time between-the execution of this Agreement and the completion
of the Project, with the costs of such audit borne. by the State. After
completion of the Project, the State may require the Grantee to conduct a
final audit, qt the Grantee's expense, such audit to be conducted by and a
report prepared by an independent.Certified Public Accountant.
Failure or refusal by the Grantee to comply with this provision: shall be
considered a substantial failure to comply with this Agreement, and the.
State may elect to pursue any remedies provided in Article A -25 or take
any other action it deems necessary to protect its interests.
12
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County l
for Water Management and Droughts
Drought Grant
A -12. CLAIMS D'ISPUTE CLAUSE: Any claim that the Grantee may have regarding
the performance of this agreement including, but not limited to, claims for
additional compensation or extension of time, shall be submitted to .the Project
Manager, Department of Water Resources, within thirty (30) days of the
Grantee's knowledge of the claim. Project Manager and Grantee shall then
attempt to negotiate a resolution of such claim and process an amendment to
this Agreement to implement the terms of any such resolution.
A -13. REMEDIES NOT EXCLUSIVE: The use by either party of any remedy specked
herein for the enforcement of this agreement is not exclusive and- shall not
deprive the party using such remedy of, ' or limit the application of any other
remedy. provided by law.
A -14. STATE TO BE HELD HARMLESS: The Grantee agrees to indemnify the State
and its officers, agents, and' employees against and to hold the same free and.
harmless from any and all claims; demands, damages, losses, costs, expenses,
or liability due or incident to, either in whole or in part, .and whether directly or
indirectly, arising out of.the Project
A -15. INSPECTION OF BOOKS, RECORDS, AND REPORTS: 'During regular office
hours, each of the parties hereto and their duly authorized representatives shall
have the fight to inspect and to make copies of any- books, records, or reports of
either party pertaining to this Agreement-or matters related hereto. Each of the
parties hereto shall maintain and shall make available at all times for such
..inspection accurate records of all its costs,- disbdrsements, and receipts with
respect to its activities under this Agreement. Failure or refusal by the Grantee to
comply with this provision shall be considered a substantial failure to comply with
this Agreement and the State may withhold disbursements to the G.rantee.or take
any other action it deems necessary to protect its interests.
A -16. INSPECTIONS OF PROJECT BY STATE: The State shall have the right to
inspect the work being performed at any and all reasonable times during the term
of the Agreement. This right shall extend to any subcontracts, and the Grantee
shall include provisions ensuring such. access in all its contracts or subcontracts
entered into pursuant to its Agreement with the State. .
A -17. PROHIBITION AGAINST DISPOSAL OF PROPERTY WITH66T STATE
PERMISSION: The Grantee shall not sell, abandon,_ lease, transfer, exchange,
mortgage, hypothecate, or encumber in any manner whatsoever all or any
portion of any real or other property necessarily connected or used in conjunction
with the Project, without prior permission of the State. The Grantee shall not take
any action, including but not limited to actions relating to user fees, charges, and
13
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
assessments that -could adversely affect the ability of the Grantee to meet its
obligations under -this Agreement, without prior written permission.of the State.
The State may require that the proceeds from the disposition ofvany real or
personal property be remitted to the State to be applied to the Grantee's
indebtedness under this Agreement,
A -18. NO THIRD PARTY RIGHTS: The parties to this Agreement do not intend to
create rights in, or grant remedies to, any third party as a beneficiary of this
Agreement; or of any duty, covenant, obligation or undertaking established
herein.
A -19. NOTICES: All notices that are required either expressly or by implications to be
given by' one party to the other under thin Agreement shall be signed for the
Program Manager and for the Grantee by such officers, as from time to time, it
may authorize in writing to so act. All such notices shall be deemed to have
been given if delivered personally or if enclosed in a properly addressed
postage- prepaid envelope' and deposited in a United States Post Office for
delivery by registered or. certified mail.
A -20. PERFORMANCE AND ASSURANCES: Grantee agrees to faithfully and
expeditiously perform or cause to be performed all Project work as described in
the final plans and specifications as.submitted or as later amended and approved
by the State under this Agreement and to apply State funds received only to
Eligible Project - Costs.and to operate and maintain the Project in accordance with
applicable provisions of the law. In the event the State finds •it necessary to
enforce this provision or any right or power under ihis Agreement in the manner
provided by -law, Grahtee agrees to. pay all costs incurred by the State including,
but not limited to, reasonable attorneys' fees, legal expenses, and costs. The
State reserves the right to seek further written. assurances from the grantee that
the work of. the Project under this Agreement will be performed consistent with
the terms of this Agreement.
A -21. SEVERABILITY: In the event that any provision of this. Agreement is
unenforceable or held to be unenforceable, then the parties agree that all other
provisions of this Agreement have force and effect and shall not be' affected
thereby.
A -22. WAIVER OF RIGHTS: None of the provisions of ' this. Agreement shall be
deemed waived unless expressly waived in writing. It is the intention of the
parties hereto that from time to time either party may waive any of its rights under
this Agreement unless, contrary to law.' Any waiver by eiiher party hereto of rights
arising in connection with this Agreement shall not be deemed to be a waiver
with respect to any other rights or matters, and such provisions shall continue in
14
Agreement 4600008312
Municipal Water District of.Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
full force and effect:
A -23" TERMINATION WITHOUT CAUSE: ' The State may terminate this Agreement
withdut cause on 30 days advance written notice. The Grantee shall be
reimbursed for all reasonable.expenses incurred up to the date of termination.
A -24. TERMINATION FOR CAUSE:. The State may terminate.this Agreement and be
relieved of any payments should the Grantee fail to perform the requirements of
this Agreement at-the time and in the manner herein provided including but not
limited to reasons of default under A -25.
A -25. TERMINATION BY GRANTEE: Grantee may terminate this Agreement and be
relieved of contractual obligations. In doing so, Grantee must provide a
reason(s) for termination. Grantee must submit all progress reports summarizing
accomplishments up until termination date.
A -26. DEFAULT PROVISIONS:
(a) The grantee will be in default under this agreement if any of the following
occur.
1: Substantial -breach of this Agreement, or " any supplement or
amendment-to it;
2. Making any false. warranty, " representation, or statement with
respect to this Agreement;
3. Failure to make any remittance required by this Agreement.
(b) Should an event of default occur, the State may do any or all of the
following:
1. 'Demand- the State Grant be immediately-repaid, with interest, which
shall be equal to the State of California general obligation bond
interest rate in effect at the time of the default;
2. Terminate any obligation to make future payments to the Grantee;
3. Terminate the Agreement; and
4. Take any other action that it deems necessary to protect its
interests.
15
--
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
(c) . The Grantee agrees that any remedy provided in this Agreement is in
addition to and not in derogation of any other legal or equitable remedy
available.to the State as a result of a breach of this'Agreement by the
Grantee, whether such breach occurs before or after completion of the
Project.
(d) No waiver by the State of. any
breach or default occurring late
the State or its authorized agent
A -27- CONFLICT OF INTEREST:
(a) Current State Employees:
breach or default will be a waiver of any
r. A waiver will be valid only if signed by
-No State officer or '.employee shall engage in any employment,
activity or enterprise from which the officer or employee receives
compensation or has a financial interest and which is sponsored or
funded by any State agency, unless the employment, activity or
enterprise is required as a condition of regular State employment..
2. No State officer or employee shall contract on his or her own behalf
as an independent contractor with any State agency to provide
goods or services.
(b) Former State Employees:
For the two year period from the date he or she left State
employment, no former State officer or employee may enter into a
contract in which he or she engaged in any of the negotiations,.
transactions, planning, arrangements or any part of the. decision -
making process relevant to the Agreement while employed in any
capacity. by any State agency.
2. For the twelve -month period from the date he or she left State
employment, no former State officer or employee may enter into.a
contract with any State agency if he.or she was employed by that
State agency in a policy- making position in the same general
subject area as the proposed'Agreement within the twelve -month
period prior to his or her leaving State service.
A -28. WORKERS' COMPENSATION CLAUSE: The Grantee affirms that.it is aware of
the provisions of Section 3700 of the California Labor Code, which require every
employer to be insured against liability for workers' compensation or to undertake .
M
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in-Orange County
for Water Management,and Droughts
Drought.Grant
self- insurance in accordance with the provisions of that code, and the Grantee
affirms that it will comply with such provisions before commencing the
performance of the work under this Agreement and will make its contractors and
subcontractors aware of this provision.
A -29. AMERICANS WITH DISABILITIES ACT: By signing this Agreement, Grantee
assures the State that it complies with the Americans with Disabilities Act (ADA)
of 1990, (42 U.S.C. 12101 et seq.), Which prohibits discrimination on the basis of
disability, as well as all applicable. regulations and guidelines issued pursuant to
the ADA. .
A -30. DRUG -FREE WORKPLACE CERTIFICATION:
(a) Certification of.Compliance
By signing this Agreement, the Grantee, its contractors or subcontractors
hereby certify under penalty of perjury under the laws of the State of
California compliance with the requirements of the Drug -Free Workplace
Act of 1990 (Government Code .8350 et seq.) and have or will provide a
drug -free. workplace by taking the following actions: .
1. Publish a statement notifying employees, contractors and
subcontractors that unlawful manufacture, distribution;
dispensation, possession, or use of a controlled substance is
prohibited and specifying actions to be taken against employees,
contractors or subcontractors for violations, as required by
Government Code Section 8355(a).
2. Establish a Drug -Free Awareness Program, as required by.
Government - Code Section 8355(b) to inform employees,
contractors and subcontractors about all of the following:
a.
b.
c.
d.
The dangers of drug abuse in the workplace,
The Grantee's policy of maintaining a drug -free workplace,
Any available counseling, rehabilitation and employee
assistance programs, and
Penalties that may be imposed upon employees, contractors
or subcontractors for drug abuse violations.
17
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
3. Provide, as required by Government Code Section 6355(c), that
every employee,. contractor and subcontractor who works under
this Agreement:
a. Will receive a copy of the .Grantee's drug -free policy
statement, and
b. Will agree to abide by terms of the Grantee's condition of
employment, corWact or subcontract
(b) Suspension of Payments
This Agreement or State Grant may be subject to suspension of payments
or termination, or both, and the Grantee may.,be subject to debarment if
the Department.determiner;lhat: .
1. The Grantee, its contractors or subcontractors have made a false
certification, or;
2. Grantee, its contractors or subcontractors violates the certification
by failing to carry out the requirements noted above.
A -31. NON DISCRIMNATION' CLAUSE: During -the performance of this Agreement,
the Grantee, its. contractors and subcontractors shall not deny the Contract's
benefits to any person on the basis of religion, color,_ ethnic group identification,
sex, age, physical or mental disability, nor shall they discriminate unlawfully
against any employee or applicant for employment because of race, religion,
color,. national origin, ancestry, physical handicap, mental disability, medical
condition, marital - status, age, or sex. The Grantee shall ' insure that the
evaluation and treatment of employees and applicants for employment are free of
such discrimination.
The Grantee, its contractors and subcontractors shall comply with the provisions
of the Fair Employment and Housing Act (Government Code, Section 12900 et
seq.), the regulations. promulgated thereunder (California Gode of Regulations,
Title 2, Section 7285.0 et seq.), the provisions of Article 915, Chapter 1, Part 1,
Division 3, Title 2 'of the Government Code (Government Code, Sections
11135- 111.39.5) and the regulations or standards adopted by the awarding State
Agency to implement such article.
The Grantee, its contractors and subcontractors shall give written notice of their
obligations under this clause to labor organizations with which they have a
collective bargaining or other agreement.
18
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management"and Droughts
Drought Grant
The .Grantee shall include the nondiscrimination and compliance provisions of
this clause- in all contracts and subcontracts to perform work under the
Agreement.
The Grantee's signature on this Agreement shall constitute a certification under
the penalty of perjury under the laws of the State of California that the Grantee
has, unless exempted, complied. with the nondiscrimination program
requirements of Government Code, Section 12990, and Title 2, California Code.
of Regulations, Section 8103:
A -32. UNION ORGANIZING: No State funds disbursed by this State Grant will be used
to assist, promote, or deter union organizing. If Grantee makes expenditures to
assist, promote, or deter union organizing, Grantee will maintain records
sufficient to show that no State funds were used for those expenditures and that
Grantee shall provide those records to the Attomey General upon request.
19•
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
EXHIBIT B
STATEMENT OF WORK .
MUNICIPAL WATER DISTRICT OF ORANGE COUNTY, 14542
B -1 Project Goals and Objectives
The proposed project involves cocirdinated work among 11 retail water agencies with a
combined population of over a million people and annual water-sales of 230;000 acre
feet within Municipal Water District of Orange County (Grantee) to save water via
implementation of'budget based rates. It is expected-that at least 4 of the retail
agencies will proceed into the implementation phase. Agencies not going to full
implementation still benefit by having the background information and tools necessary
for implementation at a later date. Water budgets can assist during drought conditions
by sending -price signals to customers who are the least efficient with their water use.
An integral part of this eff6rt is the evaluation assessment of each individual agency's
billing system with a water budget rate structure.
13-2 Project Description
Due to the deteriorating water supply situation in California, the Orange County Grand
Jury in May 2008 recommended that each retail water agency in.Orange County
consider a water budget based rate structures to encourage conservation, address
equity concems and increase revenue stability. Challenges agencies'face with'water
budget rate structures are determining staff and billing system requirements, designing
defensible water budget allocations based on scientific'data, gathering- public support
and setting realistic conservation goals. These challenges are often compounded by
lack of technical expertise and policy inexperience. This project proposes to assist the
agencies in overcoming these obstacles.
The purpose of the project is to concurrently assist 11 retail water agencies in
examining the approach and implementation of water budget rate structures or various
aspects of water budget rate structures. Grantee will conduct workshops with the full
group and then conduct detailed work with each agency on the policy and technical
issue associated with water budgets. Individual agency meetings will be held with the
appropriate policy makers and senior staff to receive input on what type of water budget
is best suited for each agency. In addiction, a billing system compatibility analysis will be
conducted and different implementation options will be provided. By channeling the
energy of 11 local communities to examine water budgets, the political environment and
the likelihood of success will be improved.
011
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange. County
for Water Management and Droughts
Drought Grant
With the potential for Metropolitan Water District of Southern California (MWD) to
declare mandatory water rationing in early 2009, this effort will position the retail.
agencies to enable implementation of water budgets for equitable allocation of water
during rationing. The main project goal is to help urban communities cope with water
shortages and drought conditions, but the water management benefits continue to
accrue each and every year. Equitable allocation of indoor and outdoor water needs by.
account allows agencies to scientifically determine which accounts are over their
allotment. Water agencies can focus resources on saving water from non - efficient
accounts. Utilisation of water budgets makes them the most equitable mechanism for
water conservation. Agencies with sewer rates based on water consumption can
accrue additional benefits. Due to the nature of this project, CEQA action is not
required. All legal actions will be handled by the implementing agencies.
Grantee has designed the following 10 tasks to produce a proactive plan. The steps
proposed for water budget based rates are based on the American Water Works
Association, Rates and Charge Manual, the industry standard for water rate setting.
Task 1 Administration
Task includes general administration and coordination. among the 11 retail agencies and
consultants; quarterly progress -report preparation and invoicing; and a joint agency
kickoff meeting to be held at the beginning of the project. Grantee staff will be'
facilitating and managing the program on behalf of all of the participating retail agencies.
Task 2 Identify Cost and Agency Revenue Requirements
Task 2 involves the identification of the annual cash requirements to pay for the
associated costs of maintaining water agency operations, while meeting its debt
coverage ratio and reserve requirements. Red Oak will hold a workshop on how to
conduct this analysis- 1
Task 3 Cost of Service Analysis
Grantee and Red Oak will hold a workshop which will educate the retail agencies on
how to conduct a cost of service analysis. The individual agencies will develop details
on customer classes and fixed versus variable costs.
Task 4 Develop Rate Structure and Water Budgets
The workshops discussed under Tasks 2 and 3 may be•part of a larger workshop on
Rate Structures and Water Budgets. In addition, Grantee and Red Oak will conduct the
following three subtasks:
21.
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
-Drought Grant
Policy Factors for Indoor /Outdoor Allocation — Grantee and Red Oak will hold a series of
workshops and meetings.to develop policy options associated with indoor and outdoor
water. allocation. These policy options will s6. rve as the found atiori for developing water
budgets. .
Development of Water. Budget Database — Based on the policy option developed in the
above task, each retail agency will develop the appropriate allocation factor for each
account Grantee will utilize Digital Map Products or another parcel map provider (GIS
analysis and County Parcel information) to develop estimates of irrigable area for each
parcel. This information-will be incorporated into this database to allow each parcel to
have a monthly water budget formulated.
Model Development and Testing — Utilizing'the water budget database as the model
driver, Red Oak will develop a water budget.model that each agency will own, which
has the ability to conduct "what if scenarios. The model will have the ability to perform:
1) fixed/variable rate adjustment, 2) water budget. allocation, 3) revenue analysis, and
4) typical monthly bills comparison.
Task 5 Legal Input— Proposition 218.Compliance
Each agency's attorney will provide input on how its water budget will comply with
Proposition 218. Compliance may range from the requirement that block prices be
based on escalating expenses-or that total revenue be based on total expenses.
Task 6 Billing and Accounting System Needs and Options
To support the implementation of the water budget based rate structure, Red Oak wilt
conduct an assessment of current customer service and billing practices and the
information systems used for GIS /Billing. Red Oak will compare the current system with
new requirements, and prepare a Fit/Gap analysis, and then make recommendations
for either a change in procedures or systems with suggested tasks, schedule, and.
estimated. resource needs. The.report will be provided in Microsoft Excel or Microsoft
Access format to the retail agency for its use,
Task 7 Outreach
Grantee, the retail agencies, and Red Oak will develop generalized information
templates for use by each agency. The individual agencies will then develop specific
outreach materials and a tailored approach for their use. The main goal of this task is to
educate the public on the benefits associated with water budgets and how they function.
22
Agreement 46000OB312
Municipal Water District of Orange County
Budget Based Rates. in Orange County
for Water Management and'Droughts
Drought Grant
Task 8 Implementation
It is anticipated that 4 out of the 11 retail agencies will implement water budget based
rate structures. - Red Oak will be available for attendance at Board of Directors or
City Council presentations for support and will develop presentation templates outlining
options for generalized customer support. Individual agencies are responsible for all
implementation phases and customer support and response for implementation within
their service areas.
Task 9 Final Report
Grantee; with the assistance of Red Oak, will develop individual reports that summarize
the activities, findings and conclusions for each retail agency. The report will discuss
the individual budget allocation used and the expected savings to be achieved. An
overall report summarizing the results will be prepared for presentation'to Department of
Water Resources.
Task 1.0 Monitoring and Evaluation
With the completion of the-final report, Grantee -will conduct annual monitoring and
evaluation to determine actual savings from this project. Grantee will conduct this
analysis by using the - double difference, a standard statistical approach when
conducting project evaluation.
Schedule- Outlined below is the general schedule. However, based on the water
supply situation, many of the agencies may want the schedule accelerated to allow .
implementation by January 2009. This accelerated schedule will be accommodated as
best as possible, should the request arise.
Task 1: General Administration
Task 2: Identify Cost and Agency Revenue Requirements
Task'3: Cost of Service Analysis
Task 4: Develop Rate Structure and Water Budgets
Task 5: Legal Input - Prop; 218 Compliance
Task 6: Billing and Accounting System Needs and Options
Task 7: Outreach
Task 8: Implementation
Task 9: Final Report
Task 10: Monitoring and Evaluation
23
Month 1 -24
Month 1 -6
Month 2 -7
Month 3-18
Month 4-20
Month 3 -18
Month 12 -24
Month 20 -24
Month 23 -25
Month 26-64
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
Water Quantity — One of the quickest drought response mechanisms that can be
developed is additional water conservation via budget based rate structures.
Documented water savings on the order of 20% have been achieved via implementation
of these types-of rate structures. For this project, a conservative estimate in annual
savings is 10,800 acre -feet per year, assuming an average agency has 18,000 acre -feet
of annual water sales and 15% savings with 4 implementing agencies. The watersaved
includes both groundwater resources and imported water from MWD from the Colorado
River and the State Water Project. The annual savings are anticipated in perpetuity.
In- stream Flow — The resulting annual savings will result in an avoided stream diversion
from the Bay -Delta and the Cglorado River basin.
Water Quality — By reducing the quantity of irrigation water being wasted, runoff from
irrigated areas will be reduced and the transport of sediments and contaminants into
waterways, streams and the ocean will be reduced.
Water Shortages/Drought Mitigation — This'project will result in significant water savings .
by reducing the water demand by about 15 %. Not only will the,project benefit urban
communities in times of shortages and drought, the anticipated savings are annual and
will persist in perpetuity. The annual value of water saved at an existing melded water
price in Orange County of $491 per acre -foot is $10 million (2008 dollars):
Energy —Based on the California Energy Commission 2005 Integrated Energy Policy
Report, energy savings associated with outdoor water conservation programs in
Southern California is 3,300 kWh /AF. With project water savings of 10,800 AF annually,
energy savings are estimated at more than 35 million kWh annually. '
Other Benefits — Water budget based rate structures provide many types of benefits.
When implemented„ they provide direct feedback to customers at each billing cycle to
measure how residents are doing compared to 'a scientifically based budget estimate.
When high water users are identified, agency customer service representatives can
easily target them for education and intervention measures. Equity among users is
critical. These rate structures measure customer performance against.a scientific norm
so all customers are evaluated on the same basis. Water conserving customers are
rewarded by remaining within the budgets while non -water conscious customers are
"charged" for water they are wasting. Water budget based rates can be used to
manage water resources both.during "drought' situations and'on an on -going basis to.
result in permanent water savings. Irrigation or water system components that may
need repair-or adjustments that might otherwise go unseen pan be flagged.
Environmental benefits also accrue by reducing water runoff and the transport of
24
Agreement .4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
sediments and contaminants into waterways, streams and the-ocean. Certain -water
budget rate structures are known to improve revenue instability, a financial concern
when designing conservation rate structures. These types of rates also result in a
reduction in peak demand,.which provides financial savings in capital improvement
costs.. Savings in. treatment costs on the sewer side also result.
. Deeliverables
The Grantee is responsible for the following deliverables:
Quarterly reports documenting progress, task completion, and project success as
detailed in Exhibit B; Attachment 1.
Draft final report and associated data at Agreement end date, detailed in Exhibit B,
Attachment 2.
Final report due approximately two months following the Agreement end date, as
detailed in Exhibit B, Attachment 2.
Annual Report of Benefits and Costs for 5 consecutive years, as detailed in Exhibit B,
Attachment 3.
Projected benefits will be validated through data analysis and reported according
to Monitoring and Verification Plan.
B-3 Project Monitoring and Evaluation Plan
Pre - Proiect Conditions, Baseline Data, Assumptions and Accuracy of Data
The pre - project data exist in documents such as the Orange County Water Agencies
2007 Water Rates and Water System Operations and Financial Information Report.
Proposed Task 1 provides baseline data which includes agency - speck costs and
revenue requirements.
Monitoring Plan and Performance Measures
The Monitoring Plan will include annual water use information and .performance
measures such as total and unit water use (per person, per residential.unit, per
employee, etc).
Post Proiect Verification of Results and Benefits
Comparison to customer and total - annual use will be made to evaluate temporal water
savings towards the 15% goal.
25
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
Estimated Monitoring and Evaluation Costs
Up -front billing system software modifications to enable monitoring report generation
costs are estimated at $10,000 per agency. The annual report generation and
evaluation cost are estimated at $5,000 per agency.
B-4 Qualification of Applicants and Cooperators
Grantee is the third largest member agency of Metropolitan Water District and serves a
population of about 2.3 million residents through 26 client agencies. Grantee has been
instrumental in coordinating implementation of water conservation programs on a
regional basis in Orange County since the early 1990's and was one of the first
agencies to sign the California Urban Water Conservation Council (CUWCC) MOU for
implementation of the BMPs. Grantee has a.number of ongoing programs such as.this
where. programs are facilitated for a large number of agencies to gain economy of scale
and where the management and administration of the program can be centered in one
location for the beneft of many agencies. Currently, Grantee is administering a variety
of programs including SmarTimer and Sprinkler Nozzle Rebates, Industrial Process
Improvements, Toilet and Clothes Washer Rebates and plumbing, fixture rebates for
businesses operating in Orange County. For.this project, 11 of our agencies will be
participating representing over a million residents and 230,000 AF of water sales on an
annual basis. The numbers in the brackets indicate population served and total water
sales acre -feet in FY 2006 -071, respectively. The 11 cooperating agencies include City
of Tustin.(62,100; 13,2111, City of Buena Park (82,450; 18,402), City of Huntington
Beach (196,954; 31,649 ), Yorba Linda Water District (75,400; 24,021), Laguna Beach
County Water District (22,000; 4,105), El Toro_ Water District (50;800; 11,813), Moulton
Niguel Water District (165,918; 41,682), Trabuco Canyon Water District (14,335; 5,114),
Santa Margarita Water District (160,000; 39,310), the City of Garden Grove (171,000;
34,076) and South -Coast Water District (41,600, 8,373).
Malcolm Pirnie — Red Oak Division - Red -Oak will be the consultant for Grantee and its
client agencies. Red Oak consulting is one of the leading firms that specialize in
analyzing and implementing water budget based rate structures. Red Oak has shaped
and developed the industry's standards by.writing its leading manuals and
speaking/teaching at national conferences. Red Oak's Information Management
practice is uniquely qualified to assist in the Customer Information System and Utility
Billing (CIS/UB) assessment task. Red Oak has a wide range of experience in all facets
of CIS /UB, ranging from assessment of business processes related to CI$ /UB, to
assisting in solution evaluation, selection and procurement, to project implementation
assistance, to actual modfications . of custom billing systems. Red Oak's Information
Management team also has a strong IT capability, having developed numerous custom
26
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
Management team also has a strong IT capability, having developed numerous custom
solutions for our clients, in areas related to billing and beyond.
Digital Map Products - Grantee will utilize the services of Digital Map Products or
another provider of similar information to develop estimates of irrigable area and
monthly irrigation budgets for all parcels within the participating client agencies. This
information is critical to the development of the irrigation water budget portion for-each
customer and will provide the retail agencies with information that is not currently
available. This information will then be entered into the modeling software to develop
and test options for the rate structure tier width. Even if the irrigation budgets are not
incorporated directly into the billing systems, they can be utilized to measure actual
water use compared to budgeted water use and non - efficient water users for
implementation of customer interventions.
B -5 Outreach, Community Involvement, and Acceptance
Outreach and community involvement activities are an important component of this
project ' and-are covered in Task 7. Outreach will begin-in Month 12 and extends to the
end of the second year. Red Oak will develop generalized information templates
available for use by'each agency. ' The individual agencies will develop specific
materials and approach to reach out to their customers.
B-6 Budget (Exhibit C)
The State's funding share will be for tasks identified in Exhibit C. Total State share
expenditure must not exceed $685,000.00.
B -7 Schedule for Progress Reports and Payments:
A Quarterly Project Progress Report and invoice is due every three months after
execution of agreement.
A Draft Final Report is due by the end of Agreement end date.
A Final Report and Retention invoice is due two months following Agreement end
date_
Annual Report of Benefits and Costs are due once a year for five consecutives years
following the anniversary of Agreement end date.
The Agreement is executed on date that the Chief of Department of Water
Resources, Office of Water Use Efficiency and Transfers signs, and terminated as
specified in the SECTION 2 TERM OF STATE GRANT.
27
'Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
Exhibit B - Attachment 1
DWR 2008 Urban Drought Assistance Grant (Prop 50)
Quarterly Progress Report.
Date:
Contract Number:
Contractor.
Contact Person:
Phone:
Email:-
Quarter End Date:
Total State Funds Expended to Date: $
Signed, Reviewed by Designated Representative .
Progress Achieved:
Funds Expended
Deliverable % Complete -(DWR Grant) {Local Share)
Task 1
(Description)
Task 2
(Description)
Task 3
':
Total
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
(Description)
Task 4
(Description)
Activities Performed:
• - Describe the activities and deliverables completed during the reporting period;
• State the progress toward completion of the tasks. compared to the Project
schedule. Is the project on schedule or are there problems and delays?
Description of Estimated Benefits to Date:
Water Quantity — Local and.State (list units in acre feet)
Annual water savings reported as:
• Recoverable (applied water reduction);
• Irrecoverable (real water or net watersavings);
Total water savings for the life of the project reported as:
• Recoverable. (applied water reduction);
• Irrecoverable (real Water'or net water savings);
List targeted watershed, rivers and.tributaries conveying water to the Bay- Delta.
In- stream Flow — Local and State (list units in. acre feet)
Water Quality — Local and State
Drought Mitigation(s) —
Water Shortage Management -
Ener — Local and State (list units in kilowatts)
• Energy savings
Next Quarter Projections: (Describe planned - activities for the next quarter)
Please submit one original and one copy of the progress report.
Ma
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
Exhibit B- Attachment 2
DWR 2008 Urban Drought Assistance Grant (Prop 50)
Draft /Final Reports
Date:
Contract Number:
Grantee:
Contact Person:
Phone:
Email:
Description bf the Project
® Describe the project
Description of Project Goals and Objectives
U List the original goals and objectives;
® .,Detail of changes and /or adjustments made during the project; .
• Detail of causes to support changes and/or adjustments.
Description of Benefits
Water Quantity — Local and State (list units in acre feet)
Annual water savings reported as:
• Recoverable (applied water reduction);
• Irrecoverable (real water or net water savings);
Total water savings for the life of the project reported as:
• Recoverable (applied water reduction);
• Irrecoverable (real water or net water savings);
• List targeted watershed,. rivers and tributaries conveying-water to the Bay- Delta_
In- stream Flow — Local and State (list units in acre feet)
• List targeted watershed, rivers and tributaries conveying water to the Bay -Delta.
Water Quality— Local and State
® List water savings in acre feet-,
• List targeted watershed, rivers and tributaries conveying water to the Bay - Delta.
30
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in-Orange County .
for Water Management and Droughts
Drought Grant
Drought Mitigation(s)
Water Shortage Management -
Energy — Local and State (list energy units in kilowatts)
• Energy savings
Other —
• Include economic or environmental benefits if any.
Tasks and Statement of Work:
• As identified in the Contract
0 Detail of changes and /or adjustments. throughout the project
Detail of causes to support changes and /or adjustments'
As identified in the Contract
Monitoring and Assessment:
• Detail of changes and/or adjustments throughout the project
• Detail of cause`s to support changes and /or adjustments
Budget:,
Detail of changes and /or adjustments throughout the project
Detail of causes to support changes and /or adjustments
Deliverables:
• Detail"of changes and /or adjustments throughout the project
• Detail of causes to support changes and /or adjustments
Schedule or Timeline for Progress /Payment/Final Report:
• Detail . of changes and /or adjustments throughout the project
• Detail of causes to support changes and /or adjustments
Cooperators:
• Description of each cooperator /sub - contractor
• Detail. of each cooperators performance
Detail of each cooperators impact on the project outcome
Final Statement:
• Summary of expected and realized outcome
31
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water. Management and Droughts
Drought Grant
Exhibit B- Attachment 3
DWR 2008 Urban Drought Assistance Grant (Prop 50)
Post.Project Annual Report of Benefits & Costs
Annual reports of benefits and costs are required to be submitted for 5 consecutive
years after the contract end date.
Date:
Description of Benefits and Costs
• Was there any revision in benefits and costs since the completion of the project;
• Describe the impacts of the implementation of the project on the Grantee's water "
management since the project was completed.
Water Quantity — Local and State (list units iri acre feet)
Annual water savings reported as: - -
a Recoverable (applied water reduction);
Irrecoverable (real Water or net water savings).
Total water savings for the life of the project reported as:
• Recoverable (applied water reduction);
• Irrecoverable. (real water or.net water savings);
List targeted watershed, rivers and tributaries conveying water 4o the Bay- Delta.
In- stream Flow— Local, and State (list units in acre feet) .
P. . List targeted watershed, rivers and tributaries conveying water to the Bay - Delta.
Water Quality.— Local and State
List targeted watershed, rivers and tributaries conveying water to the Bay - Delta.
Drought Mitigationfs) —
Water Shortage Management -
Energy_— Local and State (list units in kilowatts)
Energy savings
Other =
Include economic or environmental benefits if,any.
32
Agreement 4600008312
Municipal Water District of Orange County
Budget Based Rates in Orange County
for Water Management and Droughts
Drought Grant
Exhibit C Project Casts
9
Attachment B
Raftelis Financial Consultants Proposal for MWDOC
ifs.]
RFC
RAFTEUS FINANCIAL
CONSULTANTS, INC.
July 15, 2010
201 S. Lake Ave, Suite 301 Phone 626.583.1894 wvvw.raftelis.com
Pasadena • CA • 91101 Fax 626.583.1411
Mr. Karl Seckel
Assistant General Manager
Municipal Water District of Orange County
P.O. Box 20895
Fountain Valley, CA 92728
Subject: Scope of Service for Water Budget Meetings and Evaluation
Dear Mr. Seckel:
Raftelis Financial Consultants, Inc. (RFC) is pleased to present this scope of service to
assist the Municipal Water District of Orange County (District) in coordinating,
educating, and evaluating the Water Budget Rate Study for the Department of Water
Resources (DWR) Grant. The scope for the various tasks is shown below.
SCOPE OF WORK
Task 1 — Attend and Participate in District Meeting(s)
RFC staff will attend, participate, and present information at District sponsored or
authorized meetings. The District will specify which meeting(s) RFC will attend and the
level of participation required. This could include the kick off meeting, educational
meetings with the stakeholders and /or elected officials on the benefits and challenges
associated with water budget rates or conference calls with the District to discuss the
logistics of interfacing with staff for the DWR grant. In meeting(s) where RFC has a
speaking role, RFC staff will prepare the appropriate PowerPoint presentation and
provide this to the District.
Meetings: Up to five (5) site meetings; 8 hours per meeting including preparation time.
Deliverable: PowerPoint presentation, when applicable.
Task 2 — Provide General Input and Assistance to District for Grant Management
RFC staff will provide input and assistance to District staff as requested in the following
areas:
o Provide input to the Member Agencies on how to handle particular issues that
may arise during the grant administration.
DWR Grant Assistance Page 1
® Look for opportunities for furthering common efforts among the agencies related
to implementation of budget based tiered rates.
A budget of 40 hours has been allocated to accomplish these tasks.
Task 3 — Evaluate Water Budget Savings
Part of the requirement of the DWR grant is for the District to evaluate the savings that
can be attributed to the implementation of a water budget rate structure. Water budget
rate structures have empirically shown water savings of between 10 to 20 %. To conduct
this analysis, RFC will use the double difference approach, a standard statistical
approach, when conducting project evaluation.
To calculate the potential water savings, RFC will use two sets of data, one from agencies
that implemented a water budget rate structure and the other from agencies that have not
participated, which is the control group. In the ideal world, the only difference between
these two agencies is that one participated and the other did not. Based on the single
family data that the District provides to RFC, RFC will calculate the average water use by
account and, if available, by parcel size. RFC will then compare the difference between
the water use prior to and after the implementation of a water budget rate structure. This
time period difference will also be calculated for the control group. Then, RFC will
calculate the difference between the two groups to estimate the actual savings that can be
attributed to the water budget rate structure.
Meetings: None.
Deliverable: Technical memo (3 to 5 pages) that shows the steps taken to conduct the
analysis and the estimated savings that can be attributed to the water budget rate
structure.
Estimated hours: 100 hours
Task 4 — Annual Update on Evaluate Water Budget Savings
Based on the work developed in Task 3, RFC will update this analysis on a yearly basis
for five years for up to five participating agencies and five control groups.
Meetings: None.
Deliverable: Update the technical memo from Task 3 on an annual basis for five years.
Estimated hours estimate for each subsequent years calculations: 40 hours
DWR Grant Assistance Page 2
FEES
RFC will perform the services described above on a time and material basis assuming the
estimated hours shown in the table below. Tasks 1, 2 and 3 will be conducted for a not to
exceed amount of $36,350. The table below shows the breakdown of cost by tasks.
FEE
1. Attend and Participate in District Meetings 5
2. Provide General Input and Assistance
3. Evaluate Water Budget Savings -1st Year
Total estimated
Hours Requirements
Gaur Fin Cons Total
40 -
40
20 80 $ 18,000
100 80
Professional Fees $ 20,000 $ 14,000
Total fees $ 34,000 $ 34,000
Estimated expenses $ 2,350 $ 2,350
Total Fees and Expenses $ 36,350 $ 36,350
The billing rates for Task 4 will be based on RFC standard rates in the respective year.
It has been a pleasure working with you in the development of this scope of work and we
look forward to assisting you with this important study. if you have any questions, please
cal l Sanjay Gaur at (213) 327 - 4405.
Respectfully submitted, Accepted by:
RAFTELIS FINANCIAL NIUNICIPAL WATER DISTRICT OF
CONSULTANTS, INC. ORANGE COUNTY
Sudhir Pardiwala
Vice President
Date:
DWR Grant Assistance Page 3
RFC
RAFTEUS FINANCIAL
CONSULTANTS, INC.
July 15, 2010
201 S. Lake Ave, Suite 301 Phone 626.583.1894 www.raftelis.com
Pasadena • CA • 91101 Fax 626.583.1411
Mr. Karl Seckel
Assistant General Manager
Municipal Water District of Orange County
P.O. Box 20895
Fountain Valley, CA 92728
Subject: Scope of Service for Water Budget Meetings and Evaluation
Dear Mr. Seckel:
Raftelis Financial Consultants, Inc. (RFC) is pleased to present this scope of service to
assist the Municipal Water District of Orange County (District) in coordinating,
educating, and evaluating the Water Budget Rate Study for the Department of Water
Resources (DWR) Grant. The scope for the various tasks is shown below.
SCOPE OF WORK
Task 1 — Attend and Participate in District Meeting(s)
RFC staff will attend, participate, and present information at District sponsored or
authorized meetings. The District will specify which meeting(s) RPC will attend and the
level of participation required. This could include the kick off meeting, educational
meetings with the stakeholders and/or elected officials on the benefits and challenges
associated with water budget rates or conference calls with the District to discuss the
logistics of interfacing with staff for the DWR grant. In meeting(s) where RFC has a
speaking role, RFC staff will prepare the appropriate PowerPoint presentation and
provide this to the District.
Meetings: Up to five (5) site meetings; 8 hours per meeting including preparation time.
Deliverable: PowerPoint presentation, when applicable.
Task 2 — Provide General Input and Assistance to District for Grant Management
RFC staff will provide input and assistance to District staff as requested in the following
areas:
o Provide input to the Member Agencies on how to handle particular issues that
may arise during the grant administration.
DWR Grant Assistance Page I
a Look for opportunities for furthering common efforts among the agencies related
to implementation of budget based tiered rates.
A budget of 40 hours has been allocated to accomplish these tasks.
Task 3 — Evaluate Water Budget Savings
Part of the requirement of the DWR grant is for the District to evaluate the savings that
can be attributed to the implementation of a water budget rate structure. Water budget
rate structures have empirically shown water savings of between 10 to 20 %. To conduct
this analysis, RFC will use the double difference approach, a standard statistical
approach, when conducting project evaluation.
To calculate the potential water savings, RFC will use two sets of data, one from agencies
that implemented a water budget rate structure and the other from agencies that have not
participated, which is the control group. In the ideal world, the only difference between
these two agencies is that one participated and the other did not. Based on the single
family data that the District provides to RFC, RFC will calculate the average water use by
account and, if available, by parcel size. RFC will then compare the difference between
the water use prior to and after the implementation of a water budget rate structure. This
time period difference will also be calculated for the control group. Then, RFC will
calculate the difference between the two groups to estimate the actual savings that can be
attributed to the water budget rate structure.
Meetings: None.
Deliverable: Technical memo (3 to 5 pages) that shows the steps taken to conduct the
analysis and the estimated savings that can be attributed to the water budget rate
structure.
Estimated hours: 100 hours
Task 4— Annual Update on Evaluate Water Budget Savings
Based on the work developed in Task 3, RFC will update this analysis on a yearly basis
for five years for up to five participating agencies and five control groups.
Meetings: None.
Deliverable: Update the technical memo from Task 3 on an annual basis for five years.
Estimated hours estimate for each subsequent years calculations: 40 hours
DWR Grant Assistance Page 2
FEES
RFC will perform the services described above on a time and material basis assuming the
estimated hours shown in the table below. Tasks 1, 2 and 3 will be conducted for a not to
exceed amount of $36,350. The table below shows the breakdown of cost by tasks.
FEE Hours Re
Meetings Gaur
1. Attend and Participate in District Meetings 5 40
2. Provide General Input and Assistance 40
3. Evaluate Water Budget Savings -1st Year 20
Total estimated hours 100
Hourly rates $ 200
Total fees 1 $
Estimated expenses
Total Fees and Expenses
Fin Cons Total
S R,000
$ 8,000
80 S 18,000
80
$ 34,000
$ 2,350
$ 36,350
The billing rates for Task 4 will be based on RFC standard rates in the respective year.
It has been a pleasure working with you in the development of this scope of work and we
look forward to assisting you with this important study. If you have any questions, please
call Sanjay Gaur at (213) 327 -4405.
Respectfully submitted,
RAFTELIS FINANCIAL
CONSULTANTS, INC.
M
Sudhir Pardiwala
Vice President
Accepted by:
MUNICIPAL WATER DISTRICT OF
ORANGE COUNTY
Title:
DWR Grant Assistance Page 3
Attachment C
Red Oak Consulting Invoices /Proposal
For Newport Beach
P A T H W A Y 5
REIDAK
- CONSULTING
• DIV1°10N or MALCOLM °Irl Nle
Bill to: City of Newport Beach
3300 Newport Blvd-
Newport Beach, CA 92658 -8915
Attention: Steve Myrter, P.E.
Utilities Director
Reference: Newport Beach Water Rate Study
T O L A S T I N G S O L U T 1 O N S
!UMb(: 03
: 1000838
\ � '
June O4, 2008
Project Number(s): 5317004 Statement Number. 2
Invoice for Professional Services provided through ]me 04, 2068 '
Contract Summary
22.60 %Complete To Date
Less Previously Billed
Amount Due This Invoice
Remit Payments only to:
MALCOLM PIRNIE, INC.
V
23444 Network Place
or
Chicago, H. 60673 -1234.
$88,1 AO
9,932.00
is •�
$12,220.00
1 C.
h tlgp'w3.�li y wive transfer please direct to:
_ LM PIRNIE, INC.
ABA # 021000021
Account # 128035990
Swift # CHASUS33
Please reference invoice number on payment: 100083803
Federal Tax ID Number: 13- 2653703
t7
PO /R #:
BUDGET #:
DEPT.
�Sdo
f�UTH. SIG:
��, {��- � - (t�t�l3 -�00�� ��ot�►t.S- Cpl a- r�.a>> _ � �8
P A T H A Y S T O L A S T I N G S O L U T I O N S
e o K11
REDDAK
CONSULTI
A 01MION °r aALCeIN olnn VR7q�
Nam F :100082289
Bill to: City of Newport Beach ........ April 22, 2008
i.
3300 Newport Blvd. S �O� ,�•t
Newport Beach, CA 92658.8915 g
Attention: Steve Myner, P.E.
Utilities Director
Reference: Newport Beach Water Rate Study
Project Number(s): 5317004 Statement Nmnbe)6::)
Invoice for Professional Services provided through April 22, 2008
Contract Summary $88,177.00
8.75 % Complete To Date t•� •q.i= 1 $7,712.00
Less Previously Billed
$7,712.00
Amou aLrlEia CovoZe�- 1
+t
.Remit Payments Daly to: y if you wish to pay by.wim transfer please d eei to:
MALCOLM PIRNIE, INC. f MALCOLM FIRNIE, INC.
23444 Network Place 1 or ARA 1Y 02/000021
Chicago, IL 60673 -1234 / I Account 9128035990
Swift 8 CELASUS33
Phtaso ref Invoice number on payment: !09652289
Federal Tax ID Number: 13.2653703
ov. To
Z�
GOOD /SEAV1t -E5 IIEC_ fIV�D
DATE: s DEPT.1
PO /R #:_ES ooi�
BUDGET #: -�D�
RUTH. SIG _
P A T H W A Y S T O L A S T I N 0 5 0 L U T I 0 N S
o ®° REIDAK ,
CpNSULTIN (a'v `
• DIVISION Of Y•IDOLx 11°x1 \C'�
EW0ICE <;....... ppbP
Number: 10008970D
Bill to: City of Newport Beach November 14, 2008
3300 Newport Blvd. GOO DS SEt'-:;!IC.FS RKEI. ED
Newport Beach, CA 92658 -8915 (, j� yet ,�S
Attention: StmMyrter,P.B. DATE, WIV DEPT-DEPT
I ilidesDirector I�V %!� *�%'i��T)l�l`118
BUDGET #: 0-
Reference: Newport Beach Water itme Study RUTH. SiG•
ProjectNumber(s): 3317004 _ StetementNumb 33
Novice for Professional Services provided through November 14, 2008
Contract Summary S8 ,77.00
38.40 %Complete To Date
Less Previously Billed
Please reference Invoice number on payment: 100089700
Federal Tea ID Number. 13- 2653703
Amount Doe This Invoice
ej 1 $13.931.00
Remit Payments only to:
If t0 pay by wire transfer pkaee dared to:
1WAI.Ci)LM PIItNIE, INC.
�' ' '- 'IRALCOLM FRU4 :, INC.
'...••`• '
23444 Network Place
�.�'
', ; � ,�•�� ABA a ortoaooza
Chicago, IL 60673 -1234
�- �'� Account 0128035990
Swlfed/CRA.SUS33 '
Please reference Invoice number on payment: 100089700
Federal Tea ID Number. 13- 2653703
P N W p Y S T O L p 5 T I N G S O L U T I O N S
®o o UBDAIC __..
• ° ° ° CONSULTING
,. a o,v,n°Y or N4Lr°LN nIerie
IlVV ICE
Numb rt IN093975
Bill to: City of Newport Beach . , ..
3300 Newport Blvd. -
Newport Beach, CA 92658.8915
Attention: Mr. Oeotge Murdoch
Utilities Director
Reference: Newport Beach Water Rate Study
Project Nurnks): 5317004 Statement N
Invoice for Professional Services provided January 01, 1900 through March 17, 2009
Contract Summary $98.177.00
.5335 %Complete To bate $47,044.00
Less Previously Billed !�.••'.;;�. Y'.F "i• ,��i. S3�'b980°
Amount Doe This Invoice 513,181.IN1
Remit Payments only to: If you wish to pay by wire emusfer please direct to:
MALCOLM PIRNIE, INC. - I ' — MALCOLM PIRNIE, INC.
23444 Network Place or ABA e1 021000021
Chicago, IL 60673-1234 � ^ 1 Account # 128035990
Swift 0 CELASUS33
Please reference Invoice number on payment: 100093975
Federal Tar ID Nu mbern 13.2653703
Malcolm Pimle refers to Malcolm Pimie, Inc. and Its dubsldlartes and affiliates.
P A T M_ w A Y 5 T O L A S T
REIDAK
A. a a ° CONSULTING
•
0Ir191°° °r MALCOLM nNNI[
Numb: 100095529
Bill b: City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA 926583915
Attention: Mr. George Murdoch
Utilities Director
Reference: Newport Beach Water Rare Study
I N 0 ,S O L U T I O N S
(.
'v
4C3
April 29, 2009
�S SAolBb
Project Number(s) 5317004 Statement Number: 5
Invoice for Professional Services provided through April 28, 2009
Contract Summary f ^�
l
72.38 %Complete To Date
Less Previously gilled
Amount Doe This Invoice �P +�r 001 1
J
Remit Payments only to: `: t.iy ,'./ If you wish to pay by wire transfer please direct do:
MALCOLM PIR M INC. l � � ,: MALCOLM PUtMF, INC.
23444 Network Place or �" ABA 9 021000021
Chicago, IL 60673.1234 I Account 8128035990
Swift 8 CHASUS33
Please reference Invoice number on payment 100095329
Federal Tax ID Number: 134653703
GOODS (SERVICES RECEIVED
DRTE: 51. DEPT. i A
POfR #:j p
BUDOM
RUIR SIG,
Malcolm Plmie refers to Malcolm Plrnle, Inc. and Its subsidiaries and affiliates. .
CONSULTING
• A DIVISION Or MALCOLM PIRMIe
Bill to: City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA 92658.8915
Attention: Mr. George Murdoch
Utilities Director
Reference: Newport Beach Water Rare Study
P A T H W A Y S• TO. L A S T I N 0 5 0 L V T 1 0' N 5
�� E Ssooi g6 F
INVOICE
Number: 100109564
June 07, 2010
Pmjed Number(s): 5317004 Statement Number: 6 &/1
Invoice for Professional Services provided April 29, 2009 through May 25, 2010
Contract Summary $91.677 1
100.00 % Complete To Date ,677.00
Less Previously Billed $63,824.00 ✓
Amount Due This Invoice $27,8
�O i
Remit Payments only to: If you wish to pay by wire transfer please direct to: ll
MALCOLM PIRNIE, INC. I MALCOLM PIRNIE, INC
23444 Network Place or ABA # 02100002/
Chicago, IL 60673 -1234 . I Account # 128035990
Swift # CHASUS33
Please reference invoice number on payment: 100109564
Federal Tai ID Number: 13.2653703
E D
JUN 1 5 20104 �!
J'ai✓lasliWiSiA�i '"'
.•y.r9 t,1 't .` -... ap
Malcolm Pirnle refers to Malcolm Pirtle, Inc. and its subsidiaries0 and affiliates.
P A T`, HWA A Y 5 T O L A 5 T 1 N 0 5 0 L U T I O N 5
®o REBDAK
• e • ° CONSULTING
A °m..O. °r °AL<°Lx r,xxa
EW0ICE
Number: 100109907
Bill to: City of Newport Beach
June 16, 7010
3300 Newport Blvd.
MALCOLM PHtME, INC.
Newport Beach, CA 97658 -8915
ABA # 021000021
Attention: Mr. George Murdoch
Account #128035990
Utilities Director
Swift # CHASUS33
Reference: Newport Beach Water Rate Study
100109907
Project Number(s): 5317004
Statement Number: 7
Invoice for Professional Services provided April 29, 2010 through May 25, 2010
Contract Summary
588,177.00
103.97 %Complete To Date
$91,677.00
Less Previously Billed
' . - $88,177.00
Amount Due This Invoice
53,500.00
Remlt Payments only to:
If you wish to pay by Wire transfer please direct to:
MALCOLM PIRNIE, INC. I
MALCOLM PHtME, INC.
23444 Network Place or
ABA # 021000021
Chtcagg11,60673 -M4
Account #128035990
1
Swift # CHASUS33
. Please refemnee Invoice number on payment-
100109907
Federal Tax m Number: 13- 2653703
cam,.. • �,. %av�z,
Malcolm Pimle refers to Malcolm Plrnle, Inc. and Its Subsidiaries and aHillates.
•
SCOPE OF SERVICES
Task 1 - Project Orientation Workshop
Red Oak will conduct a Project Orientation workshop with City Staff.
During this workshop, Red Oak will confirm the study objectives and gain
a common understanding of project team's expectations.
Prior to the Project Orientation workshop, Red Oak will provide the City
with a preliminary data request list. During the workshop, Red Oak will
discuss the data requirements to identify the appropriate source for that
data within the City.
Additionally, Red Oak will use this project orientation workshop to
discuss the implications of Proposition 218 and review additional
information that will be needed to complete the project. We will also
review and discuss in detail the forecast assumptions and City policies to
be used in the financial plan evaluation including: debt service coverage
ratios, reserve requirements, etc. In addition, we will identify the cities to
be included in the rate survey. Finally, we will clarify roles,
communication procedures, the project schedule, and due dates for
deliverables.
Task 1 Deliverables:
• Data request
• Minutes of the meeting
• Project schedule
• One project orientation meeting
Task 2 - White Paper on Conservation Rate Structures
and Prop 218
Red Oak will produce a white paper that addresses the legal concerns
associated with Prop 218 and conservation rate structures. The white
paper goal will serve as an overview for Newport Beach City Attorneys
on the rate equity Issues associated with conservation rate structures
and Prop 218. It will discuss the potential legal concerns and will request
a legal response from City Attorneys.
Task 2 Deliverables:
0 White paper that discusses the legal Issues associated with
conservation rate structures and Prop 218
® Exhibit A
Task 3 - 10 -Year Financial Plan
Red Oak will use *FORE AST to develop financial planning models for
the water for the ten -year study period. The financial plan analysis
includes the following elements:
• Examination of the Metropolitan Water District of Southern
California's (MWD) rate increases and evaluate demand
projections for Newport Beach. We will develop different scenarios
on both the demand for MWD imported water and operational
practices to see how sensitive the ten -year financial plan will be to
these factors.
• Revenue Analysis. Using the current demand for water, Red Oak will
calculate revenue at current rates for the 10-year study period.
• Revenue Requirements. A projection of operating expenses based
on the utility's budget and a review of historical cost trends will be
conducted in sufficient detail to:
• Recognize types of expenses incurred by the system;
• Project expenses for the study period; and
• Recognize changes in certain costs consistent with changes in
projected utility operations.
• Bond Compliance Analysis. An analysis will be conducted to
demonstrate that the covenants and financial requirements
associated with any existing or proposed bond obligations and other
debt instruments are complied with over the forecast period.
• Reserve Requirements. An analysis will be conducted examine three
reserve requirements that we typically recommend:
• Operational and Maintenances. This is to satisfy yearly cash flow
requirement.
• CIP Reserves. This is annual contribution for future
refurbishment programs.
• Rate stabilization Fund. This is hedge against volatility of
revenue due to weather conditions, such as drought or periods of
abnormal rain fall.
Based on the above information, Red Oak will develop a ten-year revenue
program that will maintain the water system and takes into account
foreseeable risk, such as weather.
We anticipate one meeting to confirm the revenue requirement with City
staff members. This will ensure that all foreseeable costs are accounted
for.
Task 3 Deliverables:
0 •
• Technical memorandum that highlights the assumptions used to
develop the Ten -Year financial plan
• Financial plan
• One meeting to validate the assumptions associated with the financial
plan
Task 4 - Evaluating Customer Class
For the City of Newport Beach, there are three steps required to evaluate
customer class. The first is to examine prior justification of the current
customer class. The second step is to examine individual accounts and
group them by customer characteristics. The characteristics analyzed
will include annual demands, seasonal demands, and monthly demands of
water and peaking factors. The third step is to compare the customer
class of Newport Beach with the preliminary customer class developed in
the second step. Based on this analysis we will recommend changes to
the customer classification if appropriate- We will also provide
justification for our recommended changes.
Task 4 Dellverables:
® Technical memorandum that evaluates the customer class and makes
recommendation on potential changes
Task 5 - Cost-of-Service Analysis
Once the financial plan has been developed, we will conduct the cost -of-
service analysis to ensure each customer class pays its fair share of the
cost. As mentioned, this will ensure that the proposed rate structure
meets both the objectives of the City and the requirements of
Proposition 218 and Government Code § 54999.
In addition we will conduct a cost -of- service analysis following the
standards of the American Water Works Association. There are two steps
in this process, the functionalization of major and minor cost and the
classification. The first step, functionalization of major and minor cost, is
to assign cost drivers to each item in the ten -year financial plan. This will
include all capital operations and maintenance costs. For water there are
typically three types of cost drivers:
• Normal delivery of water cost - This is the cost associated with the
normal delivery of water, such as chemicals used for treatment.
• Peaking cost - The cost is associated with meeting peak period water
demands, such as pump stations.
• •
• Customer cost -The cost associated with non - consumption factors,
such as customer support, meter reading and billing.
• Other cost - The costs that are associated with social benefits, such
as fire protection.
Once we have assigned cost drivers to each line item in the financial plan,
we will allocate these cost drivers to each customer class usage
characteristics. This is the second step of the cost -of- service analysis,
which is called classification. We will examine peaking factors, normal
delivery of water and number of customers. The final result will be
target revenue for each customer class that meets the requirement of
Proposition 218 and bases for developing fair and equitable rates.
Task S Deliverables:
■ Technical memorandum that summarizes the assumptions of the cost
of service analysis
Task 6 - Rate Design
Once the target revenues are estimated, we will develop rate structures
that meet this revenue requirement. For water, there are three major
steps. The first is to receive the billing database of the City's water
accounts in a PC -based electronic format that can be used to develop a
distribution pattern of water consumption. The second step Is to
incorporate this information into our rate design model to conduct "what
if" scenarios on different rate design structures. For instance the model
will have the ability to determine the price of each block, given the block
width. The last step is allocation of cost between fixed and volume
components. This is an important issue due to the increase exposure of
BMP 11, which is a conservation water rate sponsored by the California
Urban Water Conservation Council. This BMP 11 states that at least 70%
of total revenue should be generated from variable rates.
In addition we will examine revenue volatility associated with each
proposed rate structure and determine the reserve requirement
associated with drought pricing.
Task 7 -Workshop on Conservation Rate Structure
Once the *FORECAST model has been developed that incorporates the
ten -year financial plan, the cost- of-service analysis and rate design, we
will conduct a sensitivity analysis within the models. This step will
• •
examine different scenarios that may occur within the next ten years. In
addition, we propose to conduct two workshops, where we will determine
three water rate structures that are financially sustainable, legally
justifiable and politically acceptable for the community of Newport
Beach.
The second workshop will be with the City Council where we will present
the three defined water rate structures and the associated risk and
benefit of each option. We will recommend a water rate structure for
adoption to the City Council.
Task 7 Deliverables:
• Two rate workshop, one (1) with Senior Staff member, one (1) with
City Council members
111 Memorandum that summarizes each Rate Workshop
Task 8 • Prepare Draft Report
We will prepare a draft report that encompasses the F RECAST model
and integrates our findings from the previous tasks. We will provide a
detailed, yet easy -to -read report for City staff and policymakers. In the
case of the financial planning analysis, we will include the proposed
revenue requirement and supporting documentation on how the
proposed revenue requirement has taken into account highly probable
risks, including fluctuation in revenue due to weather conditions.
We will include a comparative matrix within the report that will identify
three neighboring utility service providers' potable water rates in
comparison to the City's current and proposed rates. We have found this
comparative analysis to be a useful tool for elected officials and City
staff in implementing new water rates. In addition, we will provide the
City with twelve (12) copies of our draft report for review and comment.
Task 8 Deliverables:
■ 12 copies of the Draft Report
Task 9 - Review, Revise & Present Report
We will review our draft report with City staff during a conference call.
This conference call will allow us to identify and incorporate comments
from the City's staff. Corrections and clarifications will be added to the
final report to ensure full coverage and clear explanations.
•
Following staff review and comment, we will present the final report,
including the recommended rate structure, at one (1) Newport Beach City
Council meeting. We are experienced in providing presentations to
various stakeholders and legislative bodies. We are particularly skilled at
presenting complex issues, such as rate studies, and presenting them to
laypersons In an understandable and concise manner.
We will provide the City with twelve (12) bound copies and one (1)
unbound reproducible copy. We will also provide our report and model to
the City on CD-ROM using MS Word, Adobe Acrobat, and MS Excel
format.
Task 9 Deliverables:
® Present the final result of the Water Rate Study at one City Council
Meeting
® 12 copies of the Final Report
Task 10 - Model Delivery and Training
Over the course of this study, we will work with City staff to compile data
and analyze results from our findings. During this process of information
exchange and workshops, our Red Oak team will involve key City staff
members in the details and the mechanics of the model. We find that
"hands -on" training throughout the project is an effective way of keeping
communication lines open and allowing for new ideas to be introduced.
Following completion of the project, we will follow-up with a formal
training session to review and demonstrate the key aspects of the
models. The training will consist of reviewing methodologies used during
the study and helping the City staff understand the financial planning and
rate setting process, model design and layout, how to adjust key
variables that support the "what -if" scenario development features of
the model. and how to update the model with new budget, CIP, and
revenue information for the ten year financial plan. At the completion of
the training, we will provide the models in Microsoft Excel format to the
City for its future use.
Task 10 Deliverables:
• Training for WORK ST model
• Completed @IQFtECAST model in Microsoft Excel format
• •
Meetings Summary
We will participate in a total of six meetings consisting of:
• One project orientation meeting
• One revenue requirement meeting
• One rate workshop with Senior Staff members
• Two presentation at a City Council Meeting
• One training workshop on running and updating the model
Data Requirements
To complete our study, ideally, we request the following information
from the City. This list is representative, rather than comprehensive.
Additional information needs will be presented to City staff as the study
proceeds.
• The most recent Master Plan or other documentation that explains
Capital Improvement Projects. This should include the projected
number of customers, and costs broken down by growth and
deficiency;
• Financial statements or other documentation on the City of Newport
Beach for the last five years. This would include all debt service
payments and line item budgets; and
• Four years of the billing data in a PC format for the all water
accounts.
FEE
Red Oak Consulting will provide the services described herein for a lump sum fee of $88.177.
Below is an estimate of hours and costs by task.
Geur M.tMSes M.... CdAlae. Everest
PIQW1
Project
Iaatrianal
Modal
Loud
Coat of
Manage
Director
Rmelad90
Developer
Malyst
Ss%lue
Fnginwr
I Adms
R...
Total
R..n t.m r t ft. T.+.. em.t
Task 1- Project drlsntatlon Workshop
la
3
+
z
zd
1
43
5 7574
+33
is ]]Iz
Task 2 - vi Paper an Conservation RAN
Striatura and Prop 218
le
e
M
1
41
7,165
7.10
Task 3 - ID-YSOr Ploencbl Plan
20
2
4
80
1
57
9
138
am
Task O- EYnlaating Caatomer pass
IQ
2
2
9l/
1
51
8838
Task 5 - CastroFSarWea Analtals
IB
4
4
24
8
1
5]
IOall
10.469
Tua 6 - Rate Design
Iz
4
4
W
51
MW
8489
Task -WerkaMp an Conservation Rate
Structure
24
32
1
61
105%
05
10,034
Tae119 - Prepare Dralt Report
16
4
1
2
30
1
64
9,024
9 224
Task 9 - Review. RaWe and Peasant Report
20
4
2
20
I
47
8559
138
8897
seek ID - Model Delivery and Tralnkrg
16
2
2
20
+
al
1 7D39
13
]e]]
total 1
V2
31
8
111 1
256
9
101
508 IS
872%
It 827 1
1 177
This lee proposal Is a lee, slier for a 60bay period
Ll
PATHWAYS T40 LASTING SOLUTIONS
725 South Figueroa Smem Suite 1540 . Ws Angeles CA 90017 • T (213) 614 -9002 - F (213) 6149003 a a .mdoakrnuultlugsom
LV..LlClAf�
.•o® D
®•°
CONSULTING
A D+Y1110Y OI MALCO10 P'OnIC
EXMBIT B
Schedule of Billing Rates for 2008
Title
Billing Rate
Vice President
$
285
Associate 11
$
250
Associate 1
$
205
M3
$
185
M2
$
185
M1
$
140
Admin
$
89
725 South Figueroa Smem Suite 1540 . Ws Angeles CA 90017 • T (213) 614 -9002 - F (213) 6149003 a a .mdoakrnuultlugsom
Attachment D
Budget Based Tiered Water Rates
Grant Sharing Proposal - April 2010
Participants
Phase 2
Digital
Mapping
Phase 1 Rate
Structure
Phase 3
IT Hardware
Software
Max Grant
Funds
Approximate
Minimum Total
Funds to Meet 71°
Local Match
Approximate Local
Funds to Meet 71%
Match
1. Garden Grove
Yes
3,000
10,000
7,000
2. Buena Park
X
X
68,000
234,000
166,000
3. Yorba Linda WD
X
X
1 68,000
234,000
166,000
4. South Coast WD
Yes
X
X
71,000
245,000
174,000
5. El Toro WD
Yes
X
X
71,000
245,000
174,000
6. Huntington Beach
X
X
68,000
234,000
166,000
7. Moulton Niguel
Yes
X
X
71,000
245,000
174,000
8. SMWD
Yes
3,000
10,000
7,000
9. Newport Beach
X
34,000
117,000
83,000
10. San Juan Capistrano
Yes
3,000
10,000
7,000
11. East Orange County WD
Yes
X
X
71,000
245,000
174,000
12. Mesa Consolidated WD
Yes
3,000
10,000
7,000
13. Fountain Valley
X
34,000
117,000
83,000
14. MWDOC + contingency
Yes
117,000
403,000
286,000
Totall
9
1 8
8
685,000
1,674,000
Unit Grant Share Per Activit
3,000
34,0001
34,000
[::2,362,000
Total Per Catego
27,0001
272,0001
272,0001
571,000
Conditions for Receipt of Grant Funds:
1. Participants must provide 71% local funds or in -kind services to receive up to 29% grant funds, up to max in the table.
2. Grant funds shown in Table cannot be exceeded unless some Participants don't use all funds.
3. Participants may "utilize" excess matching funds not required by other Participants, if available.
Attachment E
MWDOC's DRUG AND ALCOHOL FREE WORKPLACE PROVISIONS
Section 1. Introduction
Using, possessing, purchasing, selling, negotiating sale or purchase or being under the
influence of drugs, or being under the influence of alcohol, during working time, or on
District premises, including parking lots, or while operating a personal vehicle on
company business, is absolutely forbidden and will result in discharge or other discipline
as the District deems appropriate.
Section 2. Prescription Drugs:
The use of prescription drugs which would not alter an employee's work performance is
acceptable, if prescribed to the employee by a licensed healthcare provider. In the event
there is a question regarding an employee's ability to perform assigned duties safely
and effectively while using such drugs, clearance from a licensed health care provider
may be required before the employee is allowed to resume the employee's regular
duties.
Section 3. Employees Duties and Responsibilities
A. Notify their supervisor before beginning work when taking drugs (prescription
or non - prescription), which the employee reasonably believes may interfere with
the safe and effective performance of their duties;
B. Not report to work, be at work, or work while under the influence of, or while
his or her ability to perform job duties is impaired due to, on or off -duty alcohol or
drug use;
C. Not possess or use alcohol or impairing drugs or substances while on duty, at
work, or working;
D. Not directly, or through a third party, sell or provide drugs or alcohol to any
person, including an employee, while either or both employees is on duty, at
work, or working;
E. Submit immediately to an alcohol or drug test when directed by a supervisor or
manager;
F. Provide, within 24 hours of request, bonafide verification of a current valid
prescription for any potentially impairing drug or medication identified when a
drug screen /test is positive. The prescription must be from a licensed health care
provider and in the employee's name; and
G. Report any conviction received pursuant to a criminal drug statute for
violations for conduct occurring on or off District premises while conducting
District business. A report of conviction must be made to the Administrative
21
Services Manager within five (5) days after conviction, as mandated by the
Federal Drug -Free Workplace Act of 1988.
H. The unlawful manufacture, distribution, dispensing, possession or
consumption of any controlled substance is prohibited anytime an employee is on
duty, at work or working.
I. Any violation of this section and other provisions of this Policy may result in
discipline, up to and including termination.
Section 4. Alcohol at District Sponsored Events:
With prior approval of Management and in Management's sole discretion, the District
may allow employees to consume moderate amounts of alcohol at District sponsored
social events outside of normal business hours where such use is appropriate in the
circumstances. Employees who are found to be under the influence of alcohol, or who
engage in misconduct at such events, are subject to discharge or discipline, in
accordance with District processes and procedures.
Section 5. Pre- Employmerit Testing:
A. As a condition of every offer of employment or any promotion or new
assignment, the District reserves the right to require any new hire to undergo and
successfully complete a blood, urine, or other chemical test for drugs or alcohol.
B. The drug and /or alcohol test may test for any substance which could impair an
employee's ability to perform the functions of their job effectively and safely,
including, but not limited to, prescription drugs, alcohol, and other controlled
substances.
C. All testing (including sample collection, chain of custody and laboratory
services) shall be conducted in accordance with the approved procedures of the
substance Abuse and Mental Health Services Administration, formerly NIDA. The
results of testing shall be reviewed by a medical review officer, who shall be a
licensed physician, possessing appropriate training, and knowledgeable about
substance abuse disorders.
D. Pre - employment drugs and /or alcohol test result
1. A positive result form a drug and /or alcohol analysis may result in the
applicant not being hired where the applicant's use of drugs and /or
alcohol could affect requisite job standards, duties or responsibilities.
2. If a drug screen is positive at the pre - employment physical, the
applicant must provide, within 24 hours of the request, bona fide
verification of a valid current prescription for the drug identified in the drug
screen. If the prescription is not in the applicant's name or the applicant
does not provide acceptable verification, or if the drug is one that is likely
22
to impair the applicant's ability to perform the job duties, the applicant may
not be hired.
Section 6. Reasonable Cause Testing:
A. As a condition of continued employment, the District may require any
employee to undergo and successfully complete a blood, urine, or other chemical
test for drugs or alcohol whenever the District has reasonable suspicion to
believe the employee is under the influence of or impaired by drugs or alcohol
while on duty, at work, or working.
B. A determination that an employee is under the influence of or impaired by
drugs or alcohol will be based on specific personal observations of any of the
following, which alone or in combination, may constitute reasonable suspicion
depending upon the circumstances in which the behavior is observed and /or
reported:
1. Bloodshot eyes;
2. Glassy eyes;
3. Dilated pupils;
4. Slurred Speech;
5. Odor on breath;
6. Drowsiness;
7. Euphoria;
8. Mood swings;
9. Inattentiveness;
10. Excitement and confusion
11. Irritability;
12. Aggressiveness;
13. Shaking or erratic movement;
14. Disorientation;
15. Unsteady walking and movement;
16. An accident involving District property, where it appears the
employee's conduct is at fault;
17. Physical altercation;
18. Verbal altercation;
19. Unusual behavior;
20. Use or possession of alcohol, drugs or paraphernalia; and /or
21. Information obtained from a reliable person with personal knowledge.
23
C. Any Manager or supervisor requiring an employee to submit to a drug /and or
alcohol test should document in writing the facts constituting reasonable
suspicion that the employee in question is impaired or under the influence. A
manager or supervisor's failure to comply with this paragraph does not invalidate
the directive to submit to testing.
D. All testing will be conducted at a clinic or laboratory selected by the District,
with appropriate safeguards for privacy, confidentiality, and accuracy. Test
results will be kept confidential to the fullest extent required by law, and will be
maintained separate from the individual's personnel file. All testing (including
sample collection, chain of custody and laboratory services) shall be conducted
in accordance with the approved procedures of the Substance Abuse and Mental
Health Services Administration, formerly NIDA. The results of testing shall be
reviewed by a medical review officer, who shall be a licensed physician,
possessing appropriate training, and knowledgeable about substance abuse
disorders. The manager of supervisor may arrange for the employee to be
transported to a testing facility, and then home afterwards. The manager or
supervisor may also notify appropriate law enforcement agencies.
E. The reports or test results may be disclosed to District management on a
strictly need -to -know basis and to the tested employee upon request.
Disclosures, without patient consent, may also occur when: (1) the information is
compelled by law or pursuant to a lawfully issued subpoena; (2) the information
has been placed at issue in a formal dispute between the employee and the
District; (3) the information is to be used in administering an employee benefit
plan; or (4) the information is needed by medical personnel for the diagnosis or
treatment of the patient who is unable to authorize disclosure.
F. Managers and supervisors shall notify their department head or designee
when they have reasonable suspicion to believe that an employee may have
controlled substances in his or her possession or in an area not jointly or fully
controlled by the District. If the department head or designee concurs that there
is a reasonable suspicion of illegal drug possession, the department head shall
notify the appropriate law enforcement agencies.
Employees are required to cooperate with the District and its clinic or laboratory
in conducting tests. Employees who refuse to undergo testing or who interfere
with the testing process, including but not limited to interference by unreasonable
delay or contamination or tampering of the sample, will be subject to immediate
discharge or discipline.
Employees who test positive, fail to cooperate with testing procedures, or
otherwise violate this policy are subject to discharge or other discipline.
In any case involving unusual or extenuating circumstances, the District in its
sole discretion may allow an applicant or employee who tests positive to
commence or continue employment, subject to the condition that the employee
undergo some form of treatment for addictions or abuse of drugs and alcohol as
24
determined by the District, in its sole discretion and submit to periodic or random
testing as required by the District.
Section 7. Accommodation for Drug and Alcohol Rehabilitation Programs:
The District will reasonably accommodate any employee who comes forward before
violating this policy and requests to enter voluntarily into a drug or alcohol rehabilitation
program. Such requests will be kept confidential as provided by law. Once an employee
violates this policy, however, any request to enroll in a rehabilitation program in lieu of
discharge or discipline will be left to the sole discretion of the District, and will require
random testing and other necessary follow -up measures. Employees who wish to enroll
in drug or alcohol rehabilitation are encouraged to come forward before they are found
in violation of this policy.
114.7