Coachella City Council
January 22, 2025

Item 22.
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BB&K (2021) Exhibit “A”-7 PROFESSIONAL SERVICES AGREEMENT  Existing Rate Structure Evaluation. Consultant will review the advantages and disadvantages of the existing domestic water and wastewater rate formats.  Existing Tier Structure Evaluation. Consultant will review the advantages and disadvantages of the existing water tier structure. Consultant will develop and propose new tier structure.
 Proposed Rates. Based on the evaluation of existing domestic water rate structures, Consultant will develop and propose schedules of domestic water and wastewater rates, high wastewater strength surcharges and liquid waste hauler rate that recognize the following:

1. Recovery of total revenues needed for domestic water and wastewater enterprise operations

2. Domestic water and wastewater service policies, including consideration of conservation-based domestic water charges

3. Recognition of allocated costs of service and proportional cost recovery by customer class

4. Recognition that rates do not exceed the proportional cost of service attributable to individual parcels

5. Recognition of potential additional domestic water and wastewater costs to serve distant customers

6. Equitable recovery of costs for each class of service

7. Practical considerations and needs
Specific consideration will be given to establishing charges that meet City of Coachella’s policies and practical objectives regarding domestic water and wastewater service. The rate schedules will be designed to recover projected revenue requirements for the five-year study period.
 Proposed Rate Revenue Adequacy. Consultant will compare revenues expected from each customer class under proposed domestic water and wastewater rates to examine the adequacy of cost recovery by individual customer classes and for the domestic water and wastewater system in general.
 Typical Bill Comparison. Consultant will prepare comparisons of typical bills under existing and proposed rates for each customer class under various levels of domestic water usage and meter sizes and wastewater volume.

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BB&K (2021) Exhibit “A”-8 PROFESSIONAL SERVICES AGREEMENT Task 7-Financial Planning & Rate Design Computer Model
Consultant will develop spreadsheet analyses that model established financial planning, cost of service and rate design procedures. These analyses will be part of a user-friendly personal computer-based financial planning and rate design model that will enable City of Coachella staff to periodically revise and update the studies and projections of revenue and revenue requirements, financial plans, cost of service analyses and design of adequate rates on a routine basis. The model can be used to calculate annual rate adjustments or to conduct "what-if" analyses, reflecting the impact of changes in significant system variables such as customer growth and volume projections, revised budgeted revenues and expenditures, allowances for inflation, capital improvement program schedules and City of Coachella policy decisions.

The model will be developed using Microsoft Excel 2010 or newer spreadsheet software. The model’s framework will be specifically tailored and designed to recognize domestic waters a n d w a s t e w a t e r unique needs, characteristics and information base. The model will incorporate required features necessary to permit "in-house" application by City of Coachella staff. The basic financial planning and rate model development task will include the following:
 Rate Model Development. Develop a computer model concurrently with the development of the rate study tasks identified above. The financial planning and rate model will include the following features:

1. Specifically tailored and designed to recognize the utilities' unique needs, characteristics and information base, including compatibility with the City of Coachella’s budgetary and accounting systems

2. Flexible capital improvement program scheduling allowing for changes in costs, sources of funds, timing and allowances for inflation

3. Ability to develop financial plan cash flow alternatives for changes in customer, volume, and revenue projections; budgetary revisions; variations in timing and amounts of revenue increases; debt service structuring and different capital improvement program scenarios; and changes in other parameters

4. Ability to assess impact on cost-of-service allocations to user classes and domestic water and wastewater rates of alternative management decisions

5. Capability to independently design and develop domestic water and wastewater rates and charges on an annual basis, thus permitting staff to examine the phase-in needed for rate adjustments over a period of time

6. The model tests revenue generation by class and in total for proposed rates and indicates impacts on customers served through a typical monthly bill analysis

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BB&K (2021) Exhibit “A”-9 PROFESSIONAL SERVICES AGREEMENT

7. Automated ability to change study periods and retain relative information so that it can conveniently be used on an annual basis by City of Coachella staff

8. Extensive model documentation including pop-up user instructions, text formula calculation references with updatable page number notations, hyperlink references to supporting ranges (similar to Internet web page navigation) and page referenced ranges designed to be incorporated into a calculation manual

9. Incorporation of user-friendly features, including fully automated preprogrammed print and navigation menus, customized icons for specific model functions and other features; In addition, a separate procedures manual describing all available user-friendly features will also be prepared.

10. Capability of producing a wide variety of attractive and informative management reports with the click of a button; as well the ability to easily add new report tables to the print menu without any programming knowledge

11. Incorporation of advanced programming features to automate basic procedures such as initializing the rate model for a new budget year, printing, transferring data files into the rate model, setting-up screens for cash flow or other analyses and navigating throughout the rate model  Conduct Training Session. A one-day training session for City of Coachella staff in the use of the model will be conducted at the City of Coachella’s offices. It is anticipated for this proposal that the training session will take place the day before or the day after the final presentation meeting.  User Manual. A user manual documenting all of the computer model's features and pop-up user instructions will be prepared and presented to the City of Coachella during the training session.

Task 8-Deliverables
Consultant will provide the following reports and other deliverables during the course of the project:
 Draft Report. Consultant will prepare preliminary report text and tables covering the selected financial plan, cost of service allocations and rate design for review by t h e C i t y o f C o a c h e l l a . Four (4) copies of the draft report will be submitted to the City of Coachella for review and comment.

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BB&K (2021) Exhibit “A”-10 PROFESSIONAL SERVICES AGREEMENT  Final Report. Based on review comments of the draft report, a final report will be prepared. Four (4) bound copies of the report and one electronic copy of the report in the popular portable document format (PDF) will be delivered to the City of Coachella.
 Calculation Book. A book of all calculations supporting the proposed rates and report will be delivered as part of the computer model training session.  Computer Model. A compact disk (CD) or thumb drive, containing the computer model and PDF version of the report, will be delivered to the City of Coachella and used to install the model on the Client's designated computers. This model will utilize the proprietary add-in developed by the Consultant, which provides user-friendly features to all of the Consultant’s models that are designed to be used by City of Coachella staff.
 User Manual. Consultant will provide two copies of a user manual documenting all of the computer model's features and pop-up user instructions Task 9-Meetings and Presentations
Consultant will also attend meetings as requested by the City of Coachella. A total of up to seven actual or on- line virtual meetings are proposed and provided for under this task. A minimum of four of these meetings will be in person. These will be scheduled at significant stages of the study to receive project direction, review study progress, present report findings and recommendations, as described below.

Consultant should budget in addition to the meeting schedule below, a minimum of 20 hours to have online virtual meetings directly with staff for progress updates and address any questions/concerns. Meeting should be no longer than an hour, twice a month. To facilitate efficient use of project resources, meetings can be scheduled to address the domestic water and wastewater cost of service studies at the same time.  Meeting 1. Consultant will meet with City of Coachella to discuss rate design issues and obtain overall policy guidance for the study. The meeting will also discuss project requirements, alternatives, strategy, rate design philosophy, and review available basic data collected by the staff prior to the meeting, as provided for in Task 1. Consultant will also provide direction, as required, for data summary by City of Coachella staff.
 Meeting 2. A virtual on-line or in-person meeting using interactive web-based software will be scheduled near the 25% completion stage of the study to review study progress, interim study findings and to receive direction for the completion of the study.
 Meeting 3. A virtual on-line or in-person meeting using interactive web-based software will be scheduled near the midpoint of the study to review study progress, interim study findings and to receive direction for the completion of the study.

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BB&K (2021) Exhibit “A”-11 PROFESSIONAL SERVICES AGREEMENT  Meeting 4. A virtual on-line or in-person meeting will be scheduled after the City of Coachella has received the draft report to discuss City of Coachella staff comments and potential revisions to be considered for the final report.  Meeting 5. Final draft study findings will be presented to City of Coachella at a meeting with the City of Coachella Council members at a Council Study Session.  Meeting 6. Review final report of draft study findings will be presented to City of Coachella at a City of Coachella Council meeting.
 Meeting 7. To be determined based on study
Task 10-Additional Rate Study Services
The consultant selected will need to work with our attorney and our Communications Department to support the City of Coachella with public outreach and at the public hearing on Proposition 218. In addition, if requested by the Client, other services in addition to those set forth above will be performed. Such services may include:
additional domestic water and wastewater financial plans that would allow for changes in operating and capital budget projections; meetings, hearings, presentations, or reports in addition to those provided for under Tasks 1 through 9; revisions or updating of the domestic water and wastewater cash flow analyses, cost allocations and rate design to recognize post-Task 3 changes in operating expense, capital program requirements, debt service schedules, bond sale dates, budgets, staffing levels, customer service requirements, changes in the replenishment charges, organizational or other changes that may impact the findings of the preceding tasks; the preparation or presentation of special exhibits or expert testimony; and other related studies and services.

Item 22.
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BB&K (2021) Exhibit “B”-12 PROFESSIONAL SERVICES AGREEMENT EXHIBIT "B"

SCHEDULE OF SERVICES

Item 22.
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BB&K (2021) Exhibit “C”-1 PROFESSIONAL SERVICES AGREEMENT EXHIBIT "C"

COMPENSATION

Item 22.

NOVEMBER 19, 2024
www.newgenstrategies.net

COMPREHENSIVE WATER

AND WASTEWATER

RATE STUDY

REQUEST FOR PROPOSALS
Prepared for:

Cástulo Estrada - Utilities Director
City of Coachella
53990 Enterprise Way
Coachella, CA 92236
© 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC
Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

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Comprehensive Water and Wastewater Rate Study i
A. TABLE OF CONTENTS
A. TABLE OF

CONTENTS
A. TABLE OF CONTENTS....................................................................................................................I B. TRANSMITTAL COVER LETTER.....................................................................................................II C. EXECUTIVE SUMMARY ................................................................................................................1 D. KEY PROJECT PERSONNEL ...........................................................................................................3 E. UNDERSTANDING OF PROJECT....................................................................................................6 F. REFERENCES...............................................................................................................................29 G. DISCLOSURE OF CLAIMS / LAWSUITS .......................................................................................31 H. COST PROPOSAL........................................................................................................................32 I. NO DEVIATIONS FROM THE RFP.................................................................................................35 Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

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Comprehensive Water and Wastewater Rate Study ii
900 Bestgate Road, Ste. 402
Annapolis, MD 21401
Phone: (443) 951-4207
B. TRANSMITTAL COVER LETTER
B. TRANSMITTAL

COVER LETTER
November 21, 2024
Mr. Cástulo Estrada
Utilities Director
City of Coachella
53990 Enterprise Way
Coachella, CA 92236
Subject: Request for Proposals – Comprehensive Water and Wastewater Rate Study Dear Mr. Estrada:

The water and sewer utility industries are changing at a rapid pace. Maintaining the current level of service is becoming a challenge given the extreme pressure on operating and capital budgets. These pressures are the inevitable result of the increasing costs of labor, materials, water supplies, wastewater treatment technologies, and major capital assets. To develop a realistic plan to sustain the financial health of the City of Coachella’s (City) water and sewer services, what the City needs is a fresh look at everything for both the Coachella Water Authority (CWA) and the Coachella Sanitary District (CSD) - especially the ability to compare different forecast scenarios side-by-side to achieve the best future for its systems.

NewGen Strategies and Solutions, LLC (NewGen) is a management and economic consulting firm specializing in serving the water and sewer utility industry. Established in 2012, NewGen provides nationally recognized expertise in utility cost of service and rate design studies, financial feasibility studies, municipalization and privatization efforts, depreciation and appraisal studies, litigation support for state and federal regulatory proceedings, utility financial planning, and stakeholder engagement. NewGen currently employs 61 full-time professionals.

Why NewGen? Utility rates are what we do. NewGen’s core business is providing financial and management advice to water, wastewater, stormwater, energy, and solid waste utilities. Because of our strategic focus, we develop recommendations that are understandable, transparent, and achievable, which paves the way for successful buy-in across all your stakeholders. NewGen sets itself apart from other firms in the following ways:

Uniquely Qualified Project Team – We have assembled and will commit to the specific performance of our project team, which is comprised of experienced personnel who enjoy a national reputation for their expertise and common-sense advice and local experience providing these services in the Inland Empire. We have extensive experience with setting Proposition 218 compliant water rates. Our designated project manager is an active member of the AWWA Rates and Charges Committee, the Chairman of the Cost Allocation Subcommittee, and a contributing author to the upcoming 8th edition of AWWA’s Manual M1.

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B. TRANSMITTAL COVER LETTER
Comprehensive Water and Wastewater Rate Study iii
Operational Insights – NewGen makes data operational resulting in actionable decisions with defensible results. We harness existing and untapped data to forecast changes in operations, develop demand management strategies, estimate the impacts of capital investments, and identify the rational nexus underlying rate structure decisions. The link between what your service costs and how you charge your customers is essential for Prop 218 compliance. NewGen has helped our clients increase revenues to further capital investment, strengthen rate design justifications, and communicate rate change rationale to a public audience.

Stakeholder Communication – NewGen simplifies complex concepts by combining visual tools and our training expertise to ensure that clients gain a deep understanding of how the issues and underlying data drive our recommendations and scenarios. This directly impacts the evaluation of the scenarios we present, streamlines decision-making, and successfully obtains buy-in from elected officials, advisory committees, regulatory bodies, utility senior management, and utility customers.

Demonstrated Performance – The issues being faced by CWA and CSD are like those being faced by NewGen’s clients throughout the country and in the State of California. NewGen’s project team members have successfully completed projects similar to the City’s requested services for other California clients.

Client Endorsements – We understand the key issues and challenges facing the City. We have included several references in our proposal and strongly encourage the City to contact them to learn more about our firm and specific project team members.

NewGen is headquartered in Denver, Colorado, and operates 13 offices nationwide. The primary office responsible for completing this project will be NewGen’s Annapolis office, located at 900 Bestgate Road, Suite 402, Annapolis, Maryland 21401. NewGen’s website address is www.newgenstrategies.net.

I am the designated project manager for this engagement, and as a Partner at NewGen I am authorized to bind the firm into contract. Please contact me directly at (443) 951-4207 or by email at [email protected] should you have questions or if additional information is needed.

Sincerely,
Eric Callocchia
Partner
Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

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Comprehensive Water and Wastewater Rate Study 1
C. EXECUTIVE SUMMARY
C. EXECUTIVE

SUMMARY
NewGen Strategies and Solutions, LLC is a management and economic consulting firm specializing in serving the utility industry and market. Established as a Limited Liability Corporation (LLC) in August 2012, NewGen primarily serves public sector utilities and provides nationally recognized expertise in utility cost of service (COS) and rate design studies, financial feasibility studies, municipalization and privatization efforts, depreciation and appraisal studies, litigation support for state and federal regulatory proceedings, utility financial planning, and stakeholder engagement for water, wastewater, solid waste, electric, and natural gas utilities.

UTILITY RATES ARE WHAT WE DO
NewGen’s core business is providing financial and management advice related to electric, water, wastewater, stormwater, and solid waste utilities. The specialized services we offer to our clients include:
 Cost of Service/Rate Studies
 System Development Charges/Capacity Fee Studies
 Operational Reviews/Management Audits
 Comparative Analyses/Benchmarking
 Expert Witness Testimony
 Financial Feasibility Studies
 Infrastructure Management/GASB 34
 Conservation Studies
 Appraisals / Fair Market Valuations
 Organizational Effectiveness
Understanding your community, your organization, and your data are the three essential elements to developing actionable strategies to sustain your future service. NewGen believes that strategy dictates everything. Our personnel have extensive experience in all financial and management facets of municipal utilities. The City is in a situation that many utilities have found themselves, and the right answers are difficult to know for certain. Because of our strategic focus, we design our recommendations to ensure they are responsive, transparent, and reliable while paving the way for successful buy-in across all your stakeholders.

We are routinely engaged to perform multiple studies or provide additional services for our clients. This is an indication of our client’s satisfaction with our work product, as well as the trust and confidence placed in our capabilities, approaches, and recommendations.

NewGen has worked hard over the years to attract and maintain a diversified staff of professionals with exceptional skills, dedication, and talent. We have built our reputation by providing clients with solutions that are based on sound principles, economic feasibility, and innovative thinking without losing sight of budget and schedule constraints. We are proud of the long-standing relationships that we have developed with our clients.

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C. EXECUTIVE SUMMARY
2 CITY OF COACHELLA
More than 90% of NewGen’s work is in the municipal utility market; we have worked for hundreds of public agencies, from Alaska to the Florida Keys, from Maine to southern California. With a professional staff of more than sixty in thirteen offices across the country, we have worked for clients in more than thirty states.

PROJECT TEAM AND SCOPE OF WORK
Our proposed project personnel are listed below:

Name Project Role Expertise Years Experience
Eric Callocchia Project Manager Water/Sewer COS and Rate Design 15
Richard Campbell QA/QC Utility Financial Management 30+ Zachary Wright Capital Asset Analysis / Financial
Models Asset Valuation / MS Excel 12
Tianna Carnes Cost of Service and Rate Design Water/Sewer COS/Rate Design 6 Aidan Oates Data Analysis Data Analysis and Organization 3 Alexandra Robinson Study Support Data Analysis and Organization 1 Each NewGen team member brings a unique and broad understanding of utility rates and financial management. Further information and brief resumes for each team member are included in Section D. Key Project Personnel.

Our proposed scope of work is comprised of the following tasks:

Task Description Level of Effort (Hours)
Task 1 Initial Meeting And Data Collection 72
Task 2 Projection Of Revenues Under Existing Rates 68
Task 3 Development Of Revenue Requirements And Cash Flow Analyses 92 Task 4 Evaluation Of Customer Classes 44
Task 5 Cost Of Service Allocations 60
Task 6 Design Rates And Charges 52
Task 7 Financial Planning And Rate Design Computer Model 88 Task 8 Deliverables 116
Task 9 Meetings And Presentations 128
Task 10 Additional Rate Study Services 72
Total Level of Effort 792
Our scope of work assumes a start date of January 1, 2025, and that our recommended rates would be effective July 1, 2026.

The study will result in legally defensible, cost-based water and sewer rates for the City’s utilities. Our financial models will be dynamic, linked to the real-world data, and adaptable to provide the City with tools to update forecasts as estimates become knowns and forecasts become reality.

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Comprehensive Water and Wastewater Rate Study 3
D. KEY PROJECT PERSONNEL
D. KEY PROJECT

PERSONNEL
NewGen evaluates the needs of each project and assembles a Project Team of knowledgeable professionals who are uniquely qualified to provide the needed services. The project team assembled for this engagement includes widely recognized experts in utility cost of service, ratemaking, and Proposition 218 compliance.

They each possess unique knowledge of regulatory requirements and industry trends as well as best practices to develop water and sewer rates which balance the goals and objectives of the City.

The following are brief biographies of our proposed project team. Detailed resumes are included as Appendix A to this proposal.

ERIC CALLOCCHIA | PROJECT MANAGER
EDUCATION: BA, Economics/Mathematics, Johns Hopkins University AFFILIATIONS: AWWA, WEF, CWEA, GFOA
AWWA National Rates and Charges Committee - Cost of Service Subcommittee PUBLICATIONS: Contributing author, WEF Manual of Practice (MOP) 27 – Financing and Charges for Wastewater Systems; AWWA Manual M1 – Principles of Water Rates, Fees and Charges Eric Callocchia has over fourteen years of water and sewer utility cost of service and financial consulting experience. His expertise involves a broad range of industry issues, including revenue stability, customer affordability, cost of service rate making, and public engagement and education. His expertise in utility cost of service is rooted in his exceptional analytic skills and broad experience, both of which ensure that the recommendations he develops are understandable and withstand legal scrutiny.

He is involved in water and wastewater industry associations and is a contributing author to the most recent edition of the Water Environment Federation’s Manual of Practice 27 – Financing and Charges for Wastewater Systems. He is an active member of the American Water Works Association (AWWA) Rates and Charges Committee, and a contributing author to the upcoming eighth edition of AWWA’s Manual M1 – Principles of Water Rates, Fees and Charges. He is an accredited expert witness concerning utility rate setting matters and has provided expert advice in California related to one of the State’s major rate litigation disputes (SDCWA v.

Metropolitan, et al.).

Mr. Callocchia has worked with over 100 water, wastewater, and stormwater utilities throughout the United States. Through his efforts, clients have justified revenue increases, adopted cost allocation plans, implemented rate structure changes, enhanced reserve policies, funded capital financing plans, and applied other industry best practices. Mr. Callocchia regularly presents at industry conferences to keep peers informed of the cutting-edge methodologies developed as a part of his projects.

Mr. Callocchia will be the Project Manager for each COSS. He will be responsible for the day-to-day communication between NewGen and CWA and CSD staff, the overall progress of each COSS, and the delivery of NewGen’s results and recommendations to the City Council and at any other public meetings.

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D. KEY PROJECT PERSONNEL
4 CITY OF COACHELLA
RICHARD CAMPBELL | QA/QC
EDUCATION: Bachelor of Science, Electrical Engineering, University of Central Florida United States Naval Nuclear Power Program
AFFILIATIONS: AWWA, National Rates and Charges Committee, Finance, Accounting and Management Committee
Mr. Richard Campbell has 35 years of experience in the industry, previously serving as the Financial Services Director of Freese and Nichols. He has led several complex projects associated with electric, natural gas and water/wastewater utilities. Mr. Campbell is an expert in a full range of utility finance issues including debt issuance support (revenue bond feasibility); valuation studies for acquisitions and mergers; alternative capital financing analyses; economic feasibility studies; wholesale and retail ratemaking/cost of service; impact fee/system development fee analysis; asset planning and asset management; development of renewal and replacement programs; and strategic and business planning.

ZAK WRIGHT | CAPITAL COST ANALYSIS & FINANCIAL MODELING EDUCATION: Master of Business Administration, Belmont University; Bachelor of Business Administration in Finance, University of Tennessee Knoxville REGISTRATIONS AND CERTIFICATIONS: Accredited Senior Appraiser (ASA) by the American Society of Appraisers
AFFILIATIONS: Tennessee GFOA; American Society of Appraisers - Middle Tennessee Chapter Treasurer/Secretary; Society of Depreciation Professionals Mr. Zak Wright has worked at NewGen for six years and previously worked in the banking and telecommunications industries. Zak assists with appraisals, financial planning, and rate analysis. Zak has experience in underwriting, banking, corporate finance, pro forma financial analysis, financial modeling, and strategic and capital planning. Before joining NewGen, he worked as a Commercial Credit Analyst.

Mr. Cambell’s role on the project will be overall quality assurance and quality control. Given his deep industry experience, his insight into key issues will ensure that the results of each COSS are firmly established in sound industry practices.

In addition to being an Accredited Senior Appraiser, Mr. Wright is an expert at building custom advanced financial models. Mr. Wright will conduct the Capital Asset Replacement Analysis (Task 3.2) and lead the development of NewGen’s dynamic financial models (Task 7).

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D. KEY PROJECT PERSONNEL
Comprehensive Water and Wastewater Rate Study 5
TIA CARNES | COST OF SERVICE AND RATE DESIGN
EDUCATION: Master of Business Administration, Belmont University; Bachelor of Science in Bible/Biblical Studies, Cairn University Ms. Tia Carnes joined the firm as a Consultant in February 2020. During her tenure, she has provided financial modeling, appraisal/valuation support, cost of service and rate design analyses, and most notably, support to the organizational review and workshop development projects. Her experience includes leadership training and development, team assessment, and financial analysis. Ms. Carnes came to NewGen with a strong background in customer service, logistics, and high-volume task management.

AIDAN OATES | DATA ANALYST
EDUCATION: Master of Energy Management, Tulane University Bachelor of Arts in English Literature and Finance, The College of William and Mary Mr. Aidan Oates joined NewGen in 2021. He provides financial modeling, cost of service and rate design for water, wastewater, solid waste, and energy projects. His experience includes valuation, trading, economics, and investment banking specific to the Energy industry. He earned his BA in English Literature and Finance from William and Mary and a Masters in Energy Management from Tulane University.

ALEX ROBINSON | DATA ANALYST
EDUCATION: Bachelor of Arts in Political Science & Economics, Johns Hopkins University Ms. Alex Robinson joined NewGen as a full-time Consultant in November 2023. She assists on cost of service and rate design projects, performing data evaluations and applying her financial modeling skills. Ms. Robinson’s experience also includes economic analysis and affordability evaluations.

Ms. Carnes will be responsible for conducting the Cost-of-Service analysis for each COSS and developing the water and sewer rate designs. Ms. Carnes has performed water, sewer, replenishment, and irrigation cost of service and rate studies in California and knows how to develop Proposition 218 compliant rates.

Ms. Robinson will be responsible for supporting Mr. Oates and Ms. Carnes with their tasks, preparing meeting minutes, and coordinating on study tasks with Mr.

Callocchia on an ongoing basis.

Mr. Oates will be responsible for the collection, organization, understanding, and input of the data provided to NewGen to facilitate building NewGen’s custom financial models.

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Comprehensive Water and Wastewater Rate Study 6
E. UNDERSTANDING OF PROJECT
E. UNDERSTANDING

OF PROJECT
The City of Coachella, California (City), is located in Riverside County, within the Coachella Valley of California’s Colorado Desert. The city hosts a population of roughly 42,000 people, spread over an area of 30.08 square miles. The Coachella Water Authority (CWA) and Sanitation Division (CSD) are municipal utilities serving the City’s water and wastewater needs. The service area is roughly 32 square miles and serves approximately 9,000 customers (both residential and commercial). The City owns and operates 6 wells which provide groundwater as a principal source of water supply.

As set forth in the City’s Request for Proposals, the CWA and CSD are seeking a consultant to assist in the preparation of a Comprehensive Rate Study for both CWA and CSD that ensure that the City’s water and sewer utilities have sufficient and defensible funding to meet their operational, capital, and current debt obligations. In addition, the Studies shall result in rates that are proportionate to the cost of providing service to each customer class. What this means is that the City needs two Studies that result in defensible rate structures firmly established in data analysis, clear communication strategies to engage customers, and modeling tools adaptable to various operating and capital scenarios. NewGen’s approach to delivering these solutions in compliance with Proposition 218 is second to none.

NEWGEN’S APPROACH TO SCOPE OF SERVICES
The City details a thorough scope of services in its RFP that generally aligns with an industry standard Cost of Service Study (COSS). The following section of our proposal details the specific way we will complete the various tasks identified by the City in its RFP.

TASK 1 – INITIAL MEETING AND DATA COLLECTION (WATER AND SEWER COSS) Task 1 relates to NewGen’s collection, organization, understanding, and communication regarding the City’s data.

1.1 – DATA REQUEST
Immediately upon receipt of notice to proceed, NewGen will deliver to the City a detailed request for information, identifying the data that is needed to perform the COSS. The nature of this data will be financial, operational, customer account and usage, asset records, and relevant ordinances.

A key part of this task is our team’s coordination with the City’s staff to ensure that our recommendations are possible to achieve within the City’s current billing system.

Please note that the general approach to a COSS is nearly identical for a water and wastewater utility, and as the City’s RFP requires that each Study be included in the proposal as a separate scope of work item, our proposal will note whether each task or subtask will be performed for the Water COSS, the Sewer COSS, or both. Most tasks apply to both Studies.

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E. UNDERSTANDING OF PROJECT
Comprehensive Water and Wastewater Rate Study 7
The success of the COSS is dependent on our understanding of your data.

NewGen’s unique experience in data analysis sets us apart from other who offer a “one size fits all” approach. We know what to ask for to get you the answers you need.

NewGen will compile all the data relied upon to develop our recommendations in an Administrative Record that will be included in NewGen’s final deliverables. This is essential to maintain the defensibility of our Study’s recommendations.

1.2 – DATA COMPILATION
For both studies to be successful, it is essential that NewGen’s understands and organizes the City’s customer and usage data. Regarding customer account and usage data, NewGen will:
• Perform a reconciliation of the data provided with a goal to re-calculate Utility Service Revenue within our models for both CWA and CSD with a margin of error less than 2.0%. • Identify any missing account information from the list of Master Meter accounts, including a subaccount and sub-sub-account analysis to ensure that each COSS is capturing all customer and usage information.
• Removing inactive account information to ensure future demand forecasts are not overestimating customer activity.
• Cleaning up customer data to ensure a clear relationship between the data provided and the data supporting each model’s forecasts.

The result will be clean sets of data that can be imported into NewGen’s financial models.

1.3 – PROJECT PLANNING
NewGen will schedule a project kickoff meeting with all key CWA, CSD, and NewGen personnel. The purpose of this meeting is to review and validate the scope of work, introduce key study personnel, identify any roadblocks to timely completion, agree to key dates, provide City personnel with contact information for all members of the NewGen team.

Based on our experience in working with municipal governments, it is vitally important to identify and evaluate the key policy issues early in the study to ensure that consensus is developed regarding the principles that will govern the study. Within one week after the meeting, NewGen will provide Meeting Minutes to the City memorializing the meetings discussion, decisions, and expected actions.

1.4 – REVIEW AND EVALUATION OF BASIC DATA
As the City furnishes the requested data, NewGen will load all files into an online Microsoft SharePoint ® site with secure access enabled for only NewGen and City project personnel. We will review all the requested information to ensure that we have a complete understanding of the City’s utility operations.

NewGen will compile all the data relied upon to develop our recommendations in an Administrative Record that will be included in NewGen’s final deliverables. This is essential to maintain the defensibility of our Study’s results.

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E. UNDERSTANDING OF PROJECT
8 CITY OF COACHELLA

1.5 – SUPPLEMENTAL DATA REQUESTS
If additional information is required to complete the Study, NewGen will submit formal requests for such data. Again, this is an effort to memorialize the data supporting our results to maintain the defensibility of our recommendations.

TASK DELIVERABLES
 Initial Request for Information.
 Shared project database to facilitate the preservation of the study’s Administrative Record.  Validation of study data.
 On-site kickoff meeting with NewGen staff and associated material.  Supplemental data requests, if necessary.

TASK 2 – PROJECTION OF REVENUES UNDER EXISTING RATES (WATER AND SEWER COSS) Forecasting revenue under existing rates provides the basis for NewGen’s recommended revenue increase needs. Therefore, Task 2 will determine the financial reality of both CWA and CSD if rates are not adjusted from existing levels for the period FY 2027 through FY 2031.

2.1 – CUSTOMER ACCOUNT AND VOLUME PROJECTIONS
The study’s demand forecast will be based on historical usage data and discussions with the City as to projected water demand. A key variable that NewGen will develop is the rate of change in the City’s customer base, including the numbers and types of new customers to be added year-by-year as well as increases (or decreases) in water on a per capita basis.

2.2 – PROJECTION OF REVENUES UNDER EXISITNG RATES
Given the results of Task 1.2 (Data Compilation) and 2.1 (Customer Account and Volume Projections), NewGen will develop reasonable and data-based forecasts of CWA and CSD Utility Service Revenue under the existing effective water and sewer rates structures. This will provide a baseline to which NewGen can compare the net revenue required from rates each year, thus facilitating NewGen’s development of recommended rate revenue increase needs.

2.3 – PROJECT OTHER INCOME
NewGen will include reasonable projections of CWA and CSD revenues other than Utility Service Revenue.

This will include an understanding of the issues impacting the future of Property Tax revenues (Secured and Unsecured), interest income, groundwater replenishment, and other revenue sources.

TASK DELIVERABLES
 Forecast of water and sewer customer accounts and usage for the period 2026 – 2031 based on historical data and reasonable estimations of future conditions.  Forecast of CWA and CSD Utility Service Revenue under existing rates for the period 2026 – 2031.  Forecast of other CWA and CSD revenues to provide a complete future picture of revenues to support ongoing operating, capital, and reserve requirement costs.

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Comprehensive Water and Wastewater Rate Study 9
TASK 3 – DEVELOPMENT OF REVENUE REQUIREMENTS AND CASH FLOW ANALYSES (WATER AND SEWER COSS)
The sum of the O&M costs, annualized capital
costs (debt service plus cash purchases of
capital assets) and any contributions to reserves
is called the revenue requirement – the amount
of money that must be raised from all revenue
sources in a given year. The forecasted revenue
requirements for the City’s water and sewer
systems will determine NewGen’s revenue
adjustments recommendations.

NewGen will develop a detailed analysis for both
CWA and CSD to justify the need for future
revenues. The justification of forecasted costs
sets the foundation for recommended rates
and Proposition 218 compliance.

3.1 – PROJECT OPERANTION AND MAINTENANCE EXPENSE
NewGen will complete a trend analysis of the City’s historical expenses and demands to inform our evaluation of appropriate classification of costs and customer classes. Using the City’s most recently adopted operating budget as a starting point, we will review the adequacy of budgeted operating and maintenance costs. O&M expenses will be forecasted based on estimated annual inflation rates at the budgetary account line-item level. The forecast of operating expenditures will be based on:
 Review of historical operating expenditure increases by individual budget account line item.  Any changes in operations and staffing, such as additional FTEs or chemical costs.  Identifying and assessing the impact of the current capital improvement program on operating expenditures, such as new treatment technology.
 Estimation of impacts of more strict regulatory burdens on the City that may materialize within the study period.

3.2 – ROUTINE CAPITAL EXPENDITURES
Water and sewer utilities are facing increased challenges when trying to keep up with the rising cost of asset repair and rehabilitation. It is essential that the City make the necessary routine investments in its water and sewer assets – the question is, how can the City determine the proper asset replacement funding levels? If the City desires to justify an increase in spending to fund routine capital expenditures, then it needs a sound, data-driven solution to quantify the realworld value of its assets now and in the future. NewGen’s unique valuation and appraisal expertise will provide the City with the confirmation necessary to ensure proper routine capital funding and Proposition 218 compliance.

To support our recommendations, NewGen will perform a capital asset depreciation funding analysis, a sample of which is shown in Exhibit 1.

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E. UNDERSTANDING OF PROJECT
10 CITY OF COACHELLA
Capital Asset Replacement Analysis
The analysis above shows whether planned investment (green line) is sufficient to fund asset replacement based on asset depreciation by type (colored areas, averaged to the dotted red line). Although there are peaks and valleys demonstrate the end of asset useful lives based on asset depreciation schedules, on average, the green line should be above the dotted red line. This demonstrates that planned asset reinvestment is keeping pace with asset depreciation on average. NewGen will recommend, if necessary, a capital asset replacement plan that sufficiently meets the depreciation profile of the City’s assets.

3.3 – MAJOR CAPITAL IMPROVEMENT PROGRAM FINANCING PLAN
NewGen will develop financing plans for the major capital improvement program. NewGen’s model will clearly show the name, funding source, cost, and timing of each major capital improvement project over the forecast period. A sample CIP input is shown as Exhibit 2 below.

Sample Capital Improvement Program Input
The CIP input in NewGen’s models is adaptable and can instantly show the impact of project timing, costs, and funding source. NewGen will work with CWA and CSD staff to develop a financing plan that incorporates considerations for available funding, existing and forecasted revenue, bond ordinance covenants, impacts on water and sewer rates, impacts on customer affordability, and City policy.

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E. UNDERSTANDING OF PROJECT
Comprehensive Water and Wastewater Rate Study 11

3.4 – DEBT SERVICE EXPENSE
NewGen will include the annual principal and interest payments for existing debt service related to the City’s systems in the revenue requirement projections. NewGen will calculate principal and interest payment schedules for any projects funded with new debt in the CIP plan from Task 3.3 (Major Capital Improvement Program Financing Plan). The debt necessary to fund each project will be based on the project construction costs, issuance costs, and any reserve or requirements.

3.5 – RESERVE FUNDING
NewGen will review the City’s reserve fund requirements and balances for adequacy given industry guidance.

The American Water Works Association’s (AWWA) Rates and Charges Committee states that “The level of reserves maintained by a utility is an important component of short and long-term financial management, and is a key consideration in the rate-setting process.”1 Other industry groups have published recommendations for minimum utility fund reserve levels, including the Water Environment Federation (one – three months O&M costs), the International City/County Management Association (one – two months of total expenses), and The Government Finance Officers Association (No less than 45 days of total expenses).

A sample reserve recommendation table from a NewGen report is show below.

Minimum Reserve Balance Recommendation Comparison
Water Sewer
WEF (30-90 Days O+M) $524,050 - $1,572,151 $114,963 - $344,889 GFOA (45 Days Total Expenses) $1,080,345 $285,767
ICMA (30-60 Days Total Expenses) $720,230 - $1,440,460 $190,511 - $381,023 NewGen Recommended $599,282 $148,719

3.6 – PROJECTED REVENUE ADJUSTMENT NEEDS
The previous tasks in this workplan will result in two key forecasts: the total annual revenue requirement of both the City’s water and sewer systems, and the amount of annual rate revenue under the City’s existing water and sewer rates. NewGen will compare the annual cash flow given these two forecasts and determine the need to increase water and sewer revenues given the minimum reserve requirements developed in Task

3.5. A sample revenue adjustment needs analysis is shown in Exhibit 3 below:
1 AWWA Rates and Charges Committee Whitepaper, Cash Reserve Policy Guidelines, 2018 Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

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E. UNDERSTANDING OF PROJECT
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Sample Water Expenses vs. Revenues Forecast
In the above example, it is clear that the total revenues at the currently effective (FY 2023) rates are not sufficient to meet the total revenue requirement represented by the stacked bars. This kind of visual story telling helps communicate the study’s results to a non-technical audience.

3.7 – PREPARATION OF ALTERNATIVES FOR REVEIEW BY THE CLIENT NewGen will develop a minimum of four (4) financing plans each for CWA and CSD. Differences in the four forecasts may be the result of changes to forecasting assumptions such as increased/decreased demand, alternative capital financing plans, and/or changes in capital project timing/costs. Alternatively, the forecasts may share the same revenue requirements but may have modified phase-ins of revenue increases to meet cash flow needs over shorter or longer periods of time, while still maintaining compliance with all reserve policies.

As detailed later in our proposal, NewGen’s financial models do not need to be saved as different versions when comparing scenarios – each scenario can be saved in the same file and compared side-by-side in real time.

3.8 – TEST YEAR COST OF SERVICE
With our understanding of CWA and CSD’s operating, debt service, capital, and reserve requirements, we will develop a Test Year 2025 as the basis of our future projections. Future Test Years will be used to assign costs to rates throughout the FY 2026 – FY 2031 study forecast.

TASK DELIVERABLES
 Analysis of historical operating expenses.
 Forecast of reasonable future operating expenses.
 Recommendation for reserve replenishment program.
 Capital Asset Analysis and recommended routine capital replacement funding forecast.  Funding plan for major capital improvement program.
 Debt service forecasts for existing and new debt service. $0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
2023 2024 2025 2026 2027 2028
Millions
Fiscal Year
PAYGO Capital Projects
New Debt Service
Existing Debt Service
Operating Expenses
Total Revenues (FY 2023 Rates)
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E. UNDERSTANDING OF PROJECT
Comprehensive Water and Wastewater Rate Study 13
 Ten-year forecasted Cash Basis revenue requirement.
 Up to four (4) alternative financing plans recognizing major capital financing needs and different revenue phase-in scenarios.
 Test Year cost of service for FY 2025 and future years to serve as the basis for cost of service allocations and recommended rates.

TASK 4 – EVALUATION OF CUSTOMER CLASSES (WATER AND SEWER COSS) The underlying concept in this Task is the justification of charging different groups of water and/or sewer customers different fees based on justifiable allocations of system costs. This practice is commonly referred to as identifying customer classes. The practice of distinguishing between customer classes in water rate making is well established and proper when the classes impose different costs on the utility. According to the American Water Works Association (AWWA) Manual M1 – Principles of Water Rates, Fees, and Charges, 7th Edition (Manual M1), “service characteristics” can be considered when establishing customer classes. A common example for a water utility is the practice of identifying costs separately between classes of customers who demonstrate different demand patterns between their respective average and peak demands. A typical example for a sewer utility is identifying customers who contribute higher than normal, i.e., domestic, strength contaminants such as Biochemical Oxygen Demand (BOD) and Total Suspended Solids (TSS). Our evaluation of CWA’s justification for its distinction between classes is rooted in these fundamental concepts.

The City’s current water rate structure does not distinguish between customer classes but does include an inclining block volumetric rate structure. If the City desires to adopt an alternative water rate structure with different rates for different customer classes, then NewGen’s analysis will provide the justification necessary for such rates.

4.1 – REVIEW CUSTOMER CLASSES
NewGen will evaluate the City’s current water and sewer customer classes and determine the equitability of such distinctions. NewGen will rely on industry standard concepts to make these determinations, which will be rooted in the data collected for the COSS. It is important that this is not a results-based analysis. NewGen will demonstrate that fundamental customer characteristics define customer classes by grouping customers with similar demand characteristics and evaluating which customers end up in the resulting groups. NewGen will not simply determine the demand characteristics of predetermined groups of customers by class.

4.2 – DETERMINE CUSTOMER CLASS CHARACTERISTICS
After the completion of Task 4.1 (Review Customer Classes) in which NewGen will either validate or recommend changes to CWA’s and/or CSD’s customer classes, NewGen will then determine the class characteristics that will underlie our cost-of-service determinations and ultimately our recommended rates.

A sample summary of data-based customer characteristics is shown in Exhibit 4 below.

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E. UNDERSTANDING OF PROJECT
14 CITY OF COACHELLA
Sample Water Class Characteristics Summary
TASK 5 – COST OF SERVICE ALLOCATIONS (WATER AND SEWER COSS) To complete the cost-of-service analysis, NewGen would follow the industry established methodology described in Manual M1 for identifying and allocating water system revenue requirements. NewGen’s approach distributes the annual cost of providing service among customer types commensurate with customers’ service characteristics. The cost-of-service analysis involves the following tasks:

1. Functionalize costs, which is the assignment of costs to the functions of the City’s system. Examples of functions are supply, distribution, storage, meter servicing, and customer billing and collection.

2. Allocate functionalized costs to cost causation components of the City’s service. Cost causation components for water service include base demand, maximum day demand, maximum hour demand, public fire protection (i.e., the cost to comply with statutory mandates to provide fire flows), and customer service and billing costs. Cost causation components for sewer service include flow, BOD, TSS and other constituents.

3. Distribute functionalized costs by causation components, using unit costs, to customer classes in proportion to their use of the systems, including fixed capacity (i.e., meter-size or potential instantaneous demand) and variable demand (i.e., volume of use).

In this manner, NewGen’s methodology develops rates that reflect the proportional demand on the City’s system by similar types of customers. This is the approach described in AWWA Manual M1 and reviewed in many California water ratemaking appellate decisions. A graphical representation of this process is shown in Exhibit 5.

Water Cost of Service Analysis Process
January 2021 - December 2021 Average Day Max Day (NCP) Max Hour (NCP) Customer (Monthly) Customer Classification MGD % Peak Factor MGD Excess % Peak Factor MGD Excess % Connections % Residential 9.2 45.8% 1.47 13.54 4.31 40.7% 2.45 22.66 9.12 35.1% 80,373 85.5% Residential Irrigation 0.7 3.3% 3.59 2.39 1.72 16.3% 16.69 11.10 8.71 33.5% 5,424 5.8% Non-Residential 4.4 21.7% 1.21 5.29 0.92 8.7% 1.78 7.77 2.48 9.5% 6,775 7.2% Non-Residential Irrigation 0.6 2.8% 2.62 1.49 0.92 8.7% 7.51 4.28 2.79 10.7% 1,434 1.5% Large Users 2.2 11.0% 1.42 3.16 0.94 8.8% 2.05 4.56 1.41 5.4% 23 0.0% Wholesale 3.1 15.4% 1.57 4.89 1.78 16.8% 2.05 6.37 1.48 5.7% 10 0.0% Total 20.2 30.76 10.59 56.75 25.99 94,038
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Comprehensive Water and Wastewater Rate Study 15
Sewer COS Analysis follows a similar methodology, with the defining system and class characteristics rooted in data related to flow and constituent strength, as shown in the following Exhibit.

Sewer Cost of Service Analysis Process
To complete the COS analysis, functionalization, allocation, and distribution factors must be developed for the systems as a whole and each customer class.

5.1 – CAPITAL COST ALLOCATIONS
NewGen will functionalize CWA and CSD’s capital assets based on the Replace Cost New Less Depreciation (RCNLD). These functional amounts will be determined in a previous task, specifically Task 3.2 (Routine Capital Expenditures) as part of the capital depreciation analysis. A sample capital functionalization from a NewGen model is shown below as Exhibit 7.

Water Test Year Capital Cost Allocation (RCNLD)
.

Allocation of Functionalized Assets (RCNLD) Test Year % Allocation Pumping $ 39,382,198 3.3%
Treatment 24,678,056 2.1%
Storage 114,461,700 9.5%
Transmission 753,277,776 62.8%
Customer Service - 0.0%
Billing - 0.0%
Meter Costs 98,627,884 8.2%
Source of Supply 152,230,817 12.7%
Replenishment - 0.0%
Backflow 13,327,629 1.1%
Conservation - 0.0%
Fire Protection 4,177,768 0.3%
Resulting Allocation $ 1,200,163,828 100%
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16 CITY OF COACHELLA

5.2 – FUNCTIONAL COST ALLOCATIONS
The functional cost allocations developed for operating costs (OPEX) and capital costs (CAPEX) will be based on Test Year revenue requirement data and asset data on a RCNLD basis. NewGen will work with CWA and CSD staff to determine appropriate functional cost allocations tied to operating activities within the Test Year revenue requirement. A sample water functional cost allocation from a recent NewGen report is presented in the table below.

Functionalization of FY 2026 Test Year Expenses
Allocation of OPEX Allocation of CAPEX
Pumping 7.4% 3.3%
Treatment 3.3% 2.1%
Storage 3.4% 9.5%
Transmission 15.2% 62.8%
Customer Service 6.8% 0.0%
Billing 8.5% 0.0%
Meter Costs 4.0% 8.2%
Source of Supply 23.6% 12.7%
Replenishment 17.8% 0.0%
Backflow 1.6% 1.1%
Conservation 6.0% 0.0%
Fire Protection 2.4% 0.3%
Total (1) 100.0% 100.0%
(1) Functionalization process to arrive at these allocations found in Appendix B – Functionalization.

5.3 – DEVELOPMENT OF CUSTOMER CLASS UNITS OF SERVICE
Customer class units of service serve as the basis for the allocation of costs to customers based on service characteristics. Based on NewGen’s recommendations resulting from Task 4 (Evaluation of Customer Classes), we will develop units of service for each class that align with the industry standard Base/Extra Capacity method (water) and flow/strength method (sewer).

5.4 – ALLOCATION OF COSTS TO CUSTOMER CLASSES
Functional costs are allocated to system demand components on a cost causation basis (i.e., Base, Max Day, Mx Hour, etc.), and customer demands are developed on the same basis. The result is the intersection of cost and demand on system cost causative components, directly assigning appropriate system costs to customer classes. A sample customer cost allocation from a NewGen water rate study is shown in Exhibit 8 below.

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E. UNDERSTANDING OF PROJECT
Comprehensive Water and Wastewater Rate Study 17
Sample Allocation of Costs to Customer Classes (Water COS)

5.5 – DETERMINATION OF REVENUE ADEQUACY
The sum of the cost by causative component by customer class provides the basis for rates by customer class, which may increase or decrease revenues on a class basis. The following exhibit shows the ultimate cost of service allocation to customer classes of a recent NewGen water COSS:

Sample Determination of Revenue Adequacy (Water COS)
In the above example, while system wide revenues are sufficient to meet the system cost of service, it is clear that the Residential class is significantly under collecting at the current rates. To align rates with the cost of service analysis, this utility would likely gradually increase Residential rates at a faster pace than other rate classes as to not create rate shock but move the Residential class towards its allocated cost of service.

TASK DELIVERABLES
 Industry standard COSS based on AWWA M1 methodology.
 Development of Capital Cost Allocations
 Development of Functional Cost Allocations
 Development of Customer Class Units of Service
 Allocations of Costs to Customer Classes
 Demonstration of Revenue Sufficiency by class.

TASK 6 – DESIGN RATES AND CHARGES (WATER AND SEWER COSS) The results of Task 5 will be the assignment of Test Year costs to the City’s water and sewer customers, whether in total (if the City does not determine water customer classes to be desirable) or by class. There are many rate designs that can generate appropriate class revenue – the key to Task 6 is aligning recommended rates with the cost components developed in Task 5.

Customer Classification (Retail Only) Total Base Max Day Max Hour Customer Residential $ 26,931,203 $ 14,786,152 $ 5,465,360 $ 3,491,045 $ 3,188,646 Residential Irrigation 6,797,573 1,065,422 2,180,756 3,336,223 215,171 Non-Residential 9,389,740 7,004,877 1,165,887 950,196 268,780 Non-Residential Irrigation 3,208,648 914,147 1,168,447 1,069,152 56,901 Large Users 5,283,556 3,558,023 1,185,804 538,827 903
Wholesale 5,585,824 3,865,741 1,719,686 - 397
Total Customer Classification (Retail Only) $ 57,196,543 $ 31,194,361 $ 12,885,941 $ 9,385,444 $ 3,730,797 100.0% 54.5% 22.5% 16.4% 6.5%
Revenue Comparison Cost of Service Projected Revenues Variance ($) Required Rate Change Residential $ 26,931,203 $ 33,874,052 $ 6,942,849 -20.5% Residential Irrigation 6,797,573 4,284,690 (2,512,883) 58.6% Non-Residential 9,389,740 9,545,275 155,536 -1.6%
Non-Residential Irrigation 3,208,648 2,105,285 (1,103,363) 52.4% Large Users 5,283,556 3,431,814 (1,851,742) 54.0%
Wholesale 5,585,824 4,377,884 (1,207,939) 27.6%
Total Revenues $ 57,196,543 $ 57,619,001 $ 422,458 -0.7% Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

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E. UNDERSTANDING OF PROJECT
18 CITY OF COACHELLA
CALIFORNIA CONSTITUTION ARTICLE XIII D, SECTION 6 (PROPOSITION 218) Proposition 218, a portion of which is set out in the California Constitution as Article XIII D, was enacted in 1996 to ensure that public agency utility service rates, fees, and charges are reasonable and proportional to the cost of providing the applicable services. The principal requirements for application of such rates, fees, and charges, as they relate to public water service, are as follows:
 A property-related rate/fee/charge imposed by a public agency on a parcel shall not exceed the costs required to provide the property-related service.
 Revenues derived by the rate/fee/charge shall not be used for any purpose other than that for which it was imposed.
 The amount of the rate/fee/charge imposed upon any parcel shall not exceed the proportional cost of service attributable to the parcel.
 Rates must reflect services immediately available to a fee payer.  Rates may not fund general governmental services, like police and fire services.

Manual M1 states that water rates and charges should be recovered from types of customers in proportion to the cost of serving those customers. Proposition 218 requires that water rates/fees/charges be reasonable, meaning that the rate-setting methodology must be sound and that there must be a nexus between the costs and the rates charged. NewGen follows industry standard cost of service process rate-setting methodologies set forth by Manual M1, adhering to Proposition 218 requirements when developing tiered water rates to ensure that they do not exceed the proportionate cost of providing the corresponding services.

Specifically, in the San Juan Capistrano case, the court stated that any rates, including tiered rates, must “correspond to the actual cost of providing service at a given level of usage.” Furthermore, the court stated:
“And, we emphasize, there is nothing at all in [California Constitution Article XIII D, section 6,] subdivision (b)(3) or elsewhere in Proposition 218 that prevents water agencies from passing on the incrementally higher costs of expensive water to incrementally higher users. That would seem like a good idea. But subdivision (b)(3) does require they figure out the true cost of water, not simply draw lines based on water budgets... . Our courts have made it clear they interpret the Constitution to allow tiered pricing; but the voters have made it clear they want it done in a particular way.”
This statement from the court outlines several fundamental principles for a properly conducted rate analysis:
 Rates must be based on the cost of providing water service.  Tiered pricing is an acceptable methodology under Proposition 218.  Increasing block rates that pass incrementally higher costs of expensive water onto incrementally higher demand users is an acceptable methodology of proportionately allocating the costs of service under Proposition 218.

While NewGen’s COSS methodology should not be considered legal guidance, as it does not offer any assurances of compliance with any other state, federal, or other laws, our approach is informed by the best available legal guidance and strives to match that guidance.

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Comprehensive Water and Wastewater Rate Study 19
The City should understand that given the recent California Court of Appeals decision in Coziahr V. Otay Water District (Otay), its practice of having a different sewer rate structure for Residential customers and flat rate structures for NonResidential customers poses a significant legal risk.

In Otay, the trial court determined that, in the “same flaw” as in Palmdale2, Otay “discriminated against [SFR] customers” by charging them more for water by tier “than other classes of customers ․ who are charged a flat rate.” The Court of Appeals agreed. While there are many other issues discussed in the Court of Appeals decision and the City’s sewer rate structure does not exactly match that of Otay, the key issue is relevant the City given that its rate structure has different charges for Residential and Non-Residential sewer customers.

Our approach to reviewing and evaluating municipal utility rates is governed by the view that the ideal rate structure must endeavor to satisfy eight principles:

1. Understandable means that customers must be able to understand how their use of each service impacts their bills.

2. Transparency is a prime consideration
because rates must be shown to comply with
applicable local, state, and federal statutes,
particularly Proposition 218.

3. Recover Costs recognizes that rates are costdriven.

4. Financial Stability means that the utility must
meet all reserve policies and bond covenants
while maintaining cash flow.

5. Rate Stability means rates should be kept low
over time, not merely keep them low for the
short term.

6. Fairness requires that rates and charges result
in no undue discrimination among customers.

7. Avoid Subsidies recognizes that while there are
justifiable differences in cost allocations, rates
should not purposely shift cost burdens
between customer classes.

8. Economically Efficient refers to the ability of the rate schedule to encourage wise use of the resources.

Some of these criteria are in competition with others, and not all can be achieved to a maximum extent simultaneously. Rate structures must be tailored to community perceptions, realities, and values. 2 City of Palmdale v. Palmdale Water Dist. (2011) 198 Cal.App.4th 926 Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

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E. UNDERSTANDING OF PROJECT
20 CITY OF COACHELLA

6.1 – EXISTING RATE STRUCTURE EVALUATION
NewGen will evaluate the appropriateness of the current rate structures and opine on the advantages and disadvantages of each. Our evaluation will be informed by the principles discussed previously. No rate structure will perfectly align with the City’s various objectives – NewGen will discuss with the City any ranking or priority of rate structure consequences.

6.2 – EXISTING TIER STRUCTURE EVALUATION (WATER COSS)
While each customer will contribute differently to system wide demand at any given time, the City’s water tier structure must reflect a reasonable basis to assign costs due to the link between system minimum, average, and maximum (daily and hourly) demands to the costs it incurs to meet those demands. As per Manual M1, “Properly designed increasing block rates recover class-specific cost of service while sending a more conservation-oriented price signal to that class.” (Manual M1 at p. 123, emphasis added). Manual M1 goes on to state further:
“Because a system must be constructed to meet maximum-day and maximum-hour demands, system capacity is underutilized during non-peak periods. Moreover, if the system were sized to meet the average demand only, the resource and infrastructure demands could be much smaller. Consequently, an increasing block structure may be designed to recover the cost of constructing and maintaining extra capacity for the peak demands. Because this capacity is underutilized, the per-unit cost of water is higher than for base capacity, which is used year-round. In short, a block structure can remain consistent with, if not enhance, the relationship of rates to cost of service.” Manual M1 at p. 124, emphasis added.

NewGen’s cost of service methodology detailed will demonstrate tier cutoffs that reflect, as Manual M1 states, a reasonable relationship between each tier and the CWA’s system-wide demand profile.

6.3 – PROPOSED RATES
NewGen will develop proposed cost-based rates that align with the cost-of-service analysis for both water and sewer customers and, to the greatest extent possible, align with the City’s preferences relative to the evaluation criteria presented earlier in our proposal. The proposed rates will be built from the “ground up” from the cost-of-service allocations. A sample rate design is presented below from a recent NewGen report.

FY 2026 Tiered Rate Calculation
Tier Base Max Day Max Hour Conservation COS Rate
Tier 1 $0.89 $0.40 $0.00 $0.00 $1.29
Tier 2 $0.89 $0.72 $0.00 $0.00 $1.61
Tier 3 $0.89 $1.09 $2.32 $0.58 $4.88
Tier 4 $0.89 $1.32 $2.80 $0.70 $5.72
Tier 5 $0.89 $2.15 $4.56 $1.14 $8.73

6.4 – PROPOSED RATES REVENUE ADEQUACY
NewGen will demonstrate the revenue sufficiency of the proposed water and sewer rates. Because rates will have been developed by allocations of Test Year revenue requirements, they will be sufficient to fund the operating, capital, and reserve requirements of the systems. A sample visualization of this recommendation is provided below in Exhibit 10.

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E. UNDERSTANDING OF PROJECT
Comprehensive Water and Wastewater Rate Study 21
Sample Expense vs. Revenue Forecast at Proposed Rates
As stated preciously, charts like the one above help clearly communicate the need for additional revenues to fund system costs. These charts are embedded in our financial models and update in real time as inputs and assumptions change.

6.5 – TYPICAL BILL COMPARISON
Under each proposed rate scenario, NewGen will compile sample bills for typical customers in each class. A sample bill forecast is shown below.
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Millions
Restricted Operating Reserve
Transfer
Renewal & Replacement
Reserve
Municipality Appropriation
Existing Debt Service
New Debt Service
Cash Funded Capital Projects
Operating Expenses
Total Revenues Under FY 2024
Rates
Total Revenues Under
Projected Rates
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E. UNDERSTANDING OF PROJECT
22 CITY OF COACHELLA
Customer Bill Impacts – Alternative #2 (Recommended)
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Residential
Water Bill $53.25 $57.09 $59.08 $61.15 $63.29 $65.51
Sewer Bill $42.80 $53.20 $57.46 $60.90 $63.34 $65.56
Total Bi-Monthly Bill $96.05 $110.29 $116.54 $122.06 $126.63 $131.06 $ Change $14.24 $6.25 $5.52 $4.58 $4.43
% Change 14.8% 5.7% 4.7% 3.7% 3.5%
Commercial
Water Bill $149.25 $193.78 $200.56 $207.58 $214.84 $222.36 Sewer Bill $35.36 $43.95 $47.47 $50.32 $52.33 $54.16
Total Bi-Monthly Bill $184.61 $237.73 $248.03 $257.90 $267.17 $276.52 $ Change $53.12 $10.30 $9.87 $9.28 $9.35
% Change 28.8% 4.3% 4.0% 3.6% 3.5%
Industrial
Water Bill $209.65 $380.31 $393.62 $407.40 $421.66 $436.41 Sewer Bill $295.39 $367.17 $396.54 $420.33 $437.15 $452.45 Total Bi-Monthly Bill $505.04 $747.48 $790.16 $827.73 $858.80 $888.86 $ Change $242.44 $42.68 $37.57 $31.07 $30.06
% Change 48.0% 5.7% 4.8% 3.8% 3.5%

REGIONAL AGENCY BILL AND RATE COMPARISON
NewGen will compare the City’s current and proposed water and sewer bill for a typical customer of each to a similar customer in surrounding utilities of similar size. A sample chart representing this comparison is shown below. NewGen provided this information to the City of Brea as part of a water rate study.

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E. UNDERSTANDING OF PROJECT
Comprehensive Water and Wastewater Rate Study 23
Sample Regional Bill Comparison – Brea, CA

TASK DELIVERABLES
 Recommended rates under current and up to four (4) alternative rate structures.  Comparison of typical the City customer bills compared to local utilities.

TASK 7 – FINANCIAL PLANNNING AND RATE DESIGN COMPUTER MODEL (WATER AND

SEWER COSS)
NewGen’s models allow for automated model updates and data uploads, linking the forecast model to reports directly out of the City’s existing enterprise or accounting systems, allowing the integration of periodic financial reporting, and saving of scenario analysis (i.e., scenario manager). The models are also developed to include a series of manual file updating mechanisms for a series of other data sources. NewGen would review and evaluate the data sources and automation opportunities with the City staff. An illustration of these capabilities is included below.

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E. UNDERSTANDING OF PROJECT
24 CITY OF COACHELLA
NewGen Custom Model Data Import Utility
The model scenario manager allows for multiple versions of all assumptions to be saved and reloaded in real time to create scenarios which can be recovered instantaneously. Examples of assumptions that can be saved and reloaded in this manner to create scenarios include items such as:
 Inflation rates  Capital financing plan
 O&M cost escalation  Water usage by rate class
 Customer growth rates by rate class  Addition and/or removal of customers by class  Debt issuance terms  Rate changes by month and rate class  Capital project timing  Fund balance reserve policies Additional entries are included in the model that allow the City to choose further customized assumptions that can be saved. Saved scenarios can be reloaded at any time. An example of the Scenario Manager input window is shown below.

NewGen Custom Scenario Manager
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E. UNDERSTANDING OF PROJECT
Comprehensive Water and Wastewater Rate Study 25
The Financial Planning model includes embedded instructions and guidance that can be accessed within the model’s customized menus. NewGen’s custom ribbon provides functionality and instructions, in addition to pop-up windows with additional capability to drill down into specific areas for instructions as shown below.

NewGen Custom Model Ribbon
NewGen’s model also includes integrated error and data validity checking. The integrated error checking includes the ability for update notifications, user updates logs, and version control.

7.2 – CONDUCT TRAINING SESSION
NewGen will conduct a one-day training session to train City staff on the use, modification, and update of the financial models. This meeting will train staff to use the model to re-run scenarios, change assumptions, reconfigure analysis to drive additional revenues, and other key items to ensure that staff has the knowledge and experience to make full use of NewGen’s model.

7.3 – USER MANUAL
NewGen will deliver to the City user manuals for both the water and sewer COS models. While the models will contain embedded instructions, the user manual will focus on the navigation and manipulation of key model tabs. The user manual will include snapshots of model components and pop-up windows.

TASK 8 – DELIVERABLES (WATER AND SEWER COSS)
NewGen will develop the following deliverables for each COSS:

1. Draft Report – This report will be provided to City staff for review and comment. It will then be discussed at a meeting of the City Council.

2. Final Draft Report – After comments provided by the City Council, NewGen will update the draft report and bring it back in front of the Council for final approval of mailing Proposition 218 notices.

3. Calculation Book – NewGen’s financial model, as described previously, will contain all the calculations made to arrive at our recommended rates. The model contains no hidden cells or formulae that would obscure the rate setting process. Users will be able to trace each Test Year dollar to the corresponding rate that collects that dollar.

4. Computer Model – As discussed previously, NewGen will deliver to the City a computer model or models setting forth the data and calculations used to complete the study. The model will become the property of the City for the purposes of running additional scenarios and updating data as it becomes available.

5. User Manual – NewGen will compile a user manual for the financial model or models developed during the study. As NewGen’s models include embedded instructions on each model tab, the User Manual will be focused on how to navigate NewGen’s model and use the various custom forecasting tools.

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E. UNDERSTANDING OF PROJECT
26 CITY OF COACHELLA
TASK 9 – MEETINGS AND PRESENTATIONS (WATER AND SEWER COSS) NewGen will attend meetings at the request of the City throught the study. Our scope of work includes the following meetings:

1. Meeting 1 – In-person Project Kickoff meeting (see Task 1.3).

2. Meeting 2 – A virtual meeting with City staff to discuss the 25% complete status of the studies.

3. Meeting 3 – An in-person meeting with City staff to discuss the 50% complete status of the studies.

4. Meeting 4 – After the delivery of the draft reports, NewGen will hold a virtual meeting with City staff to discuss the proposed rates, project methodologies, and timing of public meetings.

5. Meeting 5 – An in-person meeting with the City Council to discuss the draft reports.

6. Meeting 6 – An in-person meeting with the City Council to discuss the final reports.

7. Meeting 7 – An additional in-person or virtual meeting at any point in the study.

TASK 10 – ADDITIONAL RATE STUDY SERVICES (WATER AND SEWER COSS, AS NEEDED) NewGen’s project team will be available for additional services related to each COSS including coordination with the City attorney and the City’s Communication Department. NewGen’s scope of work includes an assumption of additional effort related to:

1. An additional water and sewer financing plan.

2. One additional in-person meeting beyond what is stated in Task 9.

3. Support in developing the City’s Proposition 218 notices.

4. Support in responding to any challenges received during the Proposition 218 process.

NEWGEN’S QA/QC PROCESSES
NewGen recognizes that the quality of our analysis and work product is of paramount importance. To serve as a trusted advisor to our clients, it is critical that our work be of the highest caliber. Mistakes challenge our credibility with colleagues and clients and can lead to serious negative consequences. Given this, each engagement must be conducted under strict quality assurance/quality control (QA/QC) procedures. NewGen’s internal QA/QC program involves three key levels of review for every project:

LEVEL 1 – PERSONAL
At the first level of our QA/QC program, every consultant is personally responsible for their work product. Any product developed internally should be considered “client-ready” prior to being submitted to higher levels of management for review. To assist consultants in ensuring that their work product meets these standards, NewGen has developed and utilizes a “CHECK-UP” process, as demonstrated by the graphic to the right. Utilizing this as an acronym, NewGen encourages its consultants to apply each of these standards to every analysis conducted or work product prepared.

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E. UNDERSTANDING OF PROJECT
Comprehensive Water and Wastewater Rate Study 27
LEVEL 2 – PEER
The second level of our QA/QC process involves
a peer review of all analysis and work product.

As part of this process, NewGen has designated
experts in each subject matter area to serve as
“qualified reviewers.” Each analysis or work
product is reviewed and approved by a
qualified reviewer prior to further transmission
to a client.

LEVEL 3 – PRODUCT
The final level of review in our QA/QC process
seeks to ensure that the product we develop
and publish is reflective of the high standards
of our Firm. Each deliverable is reviewed by our
administrative staff to ensure it meets the
quality standards of a NewGen product,
regardless of the individual or office that
produced the product. Additionally, integrated
and embedded in the product is a QA/QC
process which automatically checks
calculations and formulas that ensure the
model is operating properly and concisely. This
process notifies users if the model was updated or if any errors are present.

IMPLEMENTATION
NewGen conducts annual training for employees on the QA/QC process. This includes in-person, multi-day workshops on project management and the proper application of the QA/QC procedures. Furthermore, each employee’s annual performance review has an entire section devoted to work quality and assesses the employee’s application of the above outlined process.

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E. UNDERSTANDING OF PROJECT
28 CITY OF COACHELLA

PROJECT SCHEDULE
NewGen’s proposed project schedule is below.

Proposed Project Schedule
The above schedule includes several key assumptions:

1. Notice to proceed on or before January 1, 2025.

2. Approval of Proposition 218 notice in January 2026.

3. Mailing of Proposition 218 notices in February 2026, beginning the required 45-day notice period.

4. Proposition 218 required Public Hearing in April 2026, at which rates are adopted.

5. Study recommended FY 2027 rates effective July 1, 2026.

PROPOSED SUBCONTRACTING ARRANGEMENTS
Upon review of the City’s Request for Proposals, NewGen affirms that no subconsultants will be needed in order to complete the requested work.

Task # Task 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5
Task 1 Initial Meeting And Data Collection
Task 2 Projection Of Revenues Under Existing Rates
Task 3 Development Of Revenue Requirements And Cash Flow Analyses Task 4 Evaluation Of Customer Classes
Task 5 Cost Of Service Allocations
Task 6 Design Rates And Charges
Task 7 Financial Plannning And Rate Design Computer Model Task 8 Deliverables A B C D
Task 9 Meetings And Presentations 1 2 3 4 5 6
Task 10 Additional Rate Study Services PH
Deliverables: Meetings:

A - Calculation Book, Computer Model, and User Manual 1 - Kickoff Meeting B - Draft Report 2 - 25% Complete (Staff)
C - Revised Draft Report 3 - 50% Complete (Staff)
D - Final Draft Report 4 - Draft Report (Staff)
5 - Draft Report (Council)
6 - Final Draft Report (Council)
PH - Proposition 218 Public Hearing
2025 2026
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Comprehensive Water and Wastewater Rate Study 29
F. REFERENCES
F.

REFERENCES
Our proposal includes references for projects in California that involve adherence to Proposition 218 and the unique circumstances of California water utilities. These projects demonstrate our firm’s capability to develop detailed, cost-based rates supported by sophisticated data analysis.

COACHELLA VALLEY WATER DISTRICT, CA – DOMESTIC WATER COST OF SERVICE STUDY (2021 – 2024)
REFERENCE: David Lacy | Finance Manager | 760.398.2661 x 2304 | [email protected] ADDRESS: 51501 Tyler Street, Coachella, CA 92236
Coachella Valley Water District (CVWD) is a special district established by the state legislature. CVWD was formed in 1918 to protect and conserve local water sources.

Since then, the District has grown into a multifaceted agency that delivers irrigation and domestic (drinking) water, collects, and recycles wastewater, provides regional storm water protection, replenishes the groundwater basin, and promotes water conservation.

The District uses a budget-based increasing tier rate structure for its consumption charges. Each customer has an individualized “water budget.” While some agencies may characterize water budgets as a means to encourage conservation or efficiency, the true purpose of a water budget is to align individual customer water demands with the District’s total cost to develop incremental water supply and distribution over long timespans.

The overall goals of the Domestic Water Study were focused on developing a financial plan and proposed rate structure that: meet the District’s financial, operational, and capital needs in a manner that equitably distributes costs and maintains the affordability of potable water service. Specific goals include:
 Develop a rate structure in line with California Proposition 218.  Set rates such that operating cash flows would remain positive for all fiscal years. This goal intends to avoid the creation of a structural operating deficit within the utility.  Set rates such that the Domestic fund reserves can be maintained at the targeted level while providing funding for necessary capital projects.
 Utilize unrestricted reserves above the reserve policy target to fund capital projects in order to minimize rate increases.
 Calculate rates that follow industry best practices and cost of service principles.

NewGen’s work with CVWD was completed in 2024 at which time the District unanimously adopted NewGen’s recommended rates.

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F. REFERENCES
30 CITY OF COACHELLA
CITY OF BREA, CA – WATER AND SEWER RATE AND IMPACT FEE STUDY (2021 – 2023) REFERENCE: Faith Madrazo. | Financial Services Manager | 714.671.4486 | [email protected] ADDRESS: 1 Civic Center Circle, Brea, CA 92821
Brea imports 100% of its water from two major water suppliers, Metropolitan Water District and Cal Domestic. Both suppliers have increased their rates consistently over that past several years. In addition, the City is required to expend capital for essential maintenance and improvements to the Brea water system. The City of Brea selected NewGen after a competitive procurement to perform a water and sewer rate and impact fee study with the following objectives:
 Develop a five-year rate forecast for the water and sewer enterprise funds.  Develop cost-based impact fees for the water and sewer systems.  Calculate drought rates based on historical demand impacts of various drought restrictions.  Determine an appropriate fixed cost recovery mechanism related to multi-family and master-meter customers.
 Evaluate the costs incurred by the water and sewer enterprises on the City itself, and the services required by the City of the water and sewer enterprises. Incorporate these additional expenses and revenues into the City’s water and sewer rates.
 Conduct Council work sessions and public outreach meetings throughout the study to solicit input from City stakeholders.

NewGen’s water and sewer rate and impact fee recommendations were all approved by Council vote.

SAN DIEGO COUNTY WATER AUTHORITY, CA – WATER COST OF SERVICE EXPERT WITNESS ANALYSIS AND TESTIMONY (2016-ONGOING)
REFERENCE: Amy Chen. | Director of MWD Program | 213 628 1244 | [email protected] ADDRESS: 4677 Overland Avenue, San Diego, CA 90012
Over a multi-year period, NewGen, has provided various financial and technical analyses to this large wholesale water agency in a very significant dispute with the Metropolitan Water District of Southern California (“MWD”) over the pricing of potable water and the pricing of wheeling services for SWP water moved through MWD’s system on behalf of the San Diego County Water Authority (SDCWA).

Among the key analysis / investigation topics for NewGen were:
 Compliance of MWD with water industry standards set forth in AWWA’s Manual M1 for developing revenue requirements and allocating costs to functions / services.  MWD’s derivation of its various rates and fees – tracing adopted rates to source documents and through cost of service allocations.
 Reverse engineering of MWD’s financial model.
 Documentation of MWD’s cost of service methodology.
 Compliance with Prop 26 as to inclusion of certain categories of costs or programs in MWD’s rates / taxes.  Review and analysis of various reports and documents on behalf of SDCWA.  Preparation of interrogatories, and support for depositions.

Our work on this series of related legal actions is ongoing.

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Comprehensive Water and Wastewater Rate Study 31
G. DISCLOSURE OF CLAIMS / LAWSUITS
G. DISCLOSURE OF

CLAIMS / LAWSUITS
All affirmations below are true and correct at the time of proposal submission.

I. LAWSUITS
NewGen affirms that no lawsuits against our firm which concern breach of contract, professional negligence, errors and omissions, malpractice, improper practices, or ethics violations have been filed in court or arbitration arising out of our services in the past five years.

II. CLAIMS
NewGen affirms that our firm has not made any claim against a public agency which concerns work performed by our firm pursuant to a contract or payment for a contract and filed that claim in court or arbitration in the past five years.

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32 CITY OF COACHELLA
H. COST PROPOSAL
H. COST

PROPOSAL

NOT-TO-EXCEED COST
Our not-to-exceed cost proposal for the scope of work specified by the City’s RFP is $192,120, comprised of the following:

1. Comprehensive Water Rate Study: $113,615.

2. Comprehensive Sewer Rate Study: $78,505.

BASIS OF NOT-TO-EXCEED COST
We develop our cost proposals by determining the number of hours of effort that will be required by each of our proposed project staff on a task-by-task basis and multiplying this number by each staff member’s hourly rate. To this estimate of professional fees, we add estimated out-of-pocket at actual cost, with no profit or overhead added to out-of-pocket expenses. Any discounts received (car rentals, hotels, etc.) are passed through to the client.

We have provided a rate sheet below that shows the hourly rates that would apply to any ad hoc or out of scope services related to the COSS and rate setting process. NewGen does not charge any fees for equipment or special services. The following rates would apply as after-hour rates with no markup. NewGen does not charge ancillary fees for things such as printing, technology, conference call services, or other such items.

Table of Hourly Rates
Employee Position Hourly Rate
Callocchia Partner / Project Manager $300
Cambell Managing Director - Water $365
Wright Senior Manager $250
Carnes Manager $200
Oates Senior Consultant $190
Robinson Consultant $170
Various Administrative Support $140
The following pages provide detailed breakdowns of both the water and sewer studies.

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H. COST PROPOSAL
Comprehensive Water and Wastewater Rate Study 33
Comprehensive Water Rate Study Budget
Out of pocket expenses assume total costs of $1,500 per person per trip and eleven person-trips, assigned 50/50 to the water and sewer studies:

1. Task 9, Meeting 1: Kickoff meeting with three key NewGen personnel (Callocchia, Campbell, Carnes).

2. Task 9, Meeting 3: Key NewGen personnel (Callocchia, Campbell, Carnes) will discuss the study’s 50% completion milestone.

3. Task 9, Meeting 5: A meeting with City Council at which Mr. Callocchia will discuss the study’s draft report.

4. Task 9, Meeting 6: A meeting with City Council at which Mr. Callocchia will discuss the study’s final report.

5. An additional in-person meeting with key NewGen personnel (Callocchia, Campbell, Carnes) assumed as a part of Task 10, Additional Services.

Comprehensive Water Rate Study
CallocchiaCampbellWrightCarnesOatesRobinsonAdmin
Task $300 $365 $250 $200 $190 $170 $140
Task 1 Initial Meeting And Data Collection 8 8 4 8 4 4 - 36 $ 9,360 $ 2,250 $ 11,610 Task 2 Projection Of Revenues Under Existing Rates 4 2 - 4 12 12 - 34 $ 7,050 $ - $ 7,050 Task 3 Development Of Revenue Requirements And Cash Flow Analyses 6 3 18 6 18 18 - 69 $ 15,075 $ - $ 15,075 Task 4 Evaluation Of Customer Classes 4 2 - 4 6 6 - 22 $ 4,890 $ - $ 4,890 Task 5 Cost Of Service Allocations 6 3 - 6 18 12 - 45 $ 9,555 $ - $ 9,555 Task 6 Design Rates And Charges 6 3 - 6 12 12 - 39 $ 8,415 $ - $ 8,415 Task 7 Financial Plannning And Rate Design Computer Model 4 2 8 6 12 12 - 44 $ 9,450 $ - $ 9,450 Task 8 Deliverables 12 12 6 12 18 18 9 87 $ 19,620 $ - $ 19,620 Task 9 Meetings And Presentations 12 4 6 12 12 12 6 64 $ 14,120 $ 3,750 $ 17,870 Task 10 Additional Rate Study Services 8 2 2 6 6 6 6 36 $ 7,830 $ 2,250 $ 10,080 Labor Hours 120 68 72 120 192 184 36 476
$105,365 $ 8,250
$113,615
Subtotal
HoursProfessional FeesOut-of-Pocket ExpensesTotal
Total Not-To-Exceed Cost
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H. COST PROPOSAL
34 CITY OF COACHELLA
Comprehensive Sewer Rate Study Budget
Out of pocket expenses assume total costs of $1,500 per person per trip and eleven person-trips, assigned 50/50 to the water and sewer studies:

1. Task 9, Meeting 1: Kickoff meeting with three key NewGen personnel (Callocchia, Campbell, Carnes).

2. Task 9, Meeting 3: Key NewGen personnel (Callocchia, Campbell, Carnes) will discuss the study’s 50% completion milestone.

3. Task 9, Meeting 5: A meeting with City Council at which Mr. Callocchia will discuss the study’s draft report.

4. Task 9, Meeting 6: A meeting with City Council at which Mr. Callocchia will discuss the study’s final report.

5. An additional in-person meeting with key NewGen personnel (Callocchia, Campbell, Carnes) assumed as a part of Task 10, Additional Services.

Comprehensive Sewer Rate Study
CallocchiaCampbellWrightCarnesOatesRobinsonAdmin
Task $300 $365 $250 $200 $190 $170 $140
Task 1 Initial Meeting And Data Collection 8 8 4 8 4 4 - 36 $ 9,360 $ 2,250 $ 11,610 Task 2 Projection Of Revenues Under Existing Rates 4 2 - 4 12 12 - 34 $ 7,050 $ - $ 7,050 Task 3 Development Of Revenue Requirements And Cash Flow Analyses 2 1 6 2 6 6 - 69 $ 5,025 $ - $ 5,025 Task 4 Evaluation Of Customer Classes 4 2 - 4 6 6 - 22 $ 4,890 $ - $ 4,890 Task 5 Cost Of Service Allocations 2 1 - 2 6 4 - 45 $ 3,185 $ - $ 3,185 Task 6 Design Rates And Charges 2 1 - 2 4 4 - 39 $ 2,805 $ - $ 2,805 Task 7 Financial Plannning And Rate Design Computer Model 4 2 8 6 12 12 - 44 $ 9,450 $ - $ 9,450 Task 8 Deliverables 4 4 2 4 6 6 3 87 $ 6,540 $ - $ 6,540 Task 9 Meetings And Presentations 12 4 6 12 12 12 6 64 $ 14,120 $ 3,750 $ 17,870 Task 10 Additional Rate Study Services 8 2 2 6 6 6 6 36 $ 7,830 $ 2,250 $ 10,080 Labor Hours 120 68 72 120 192 184 36 476
$ 70,255 $ 8,250
$ 78,505
Out-of-Pocket ExpensesTotal
Subtotal
Total Not-To-Exceed Cost
HoursProfessional Fees
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Comprehensive Water and Wastewater Rate Study 35
I. NO DEVIATIONS FROM THE RFP
I. NO DEVIATIONS

FROM THE RFP
In submitting a proposal in response to the City’s RFP, NewGen certifies that we take no exceptions to the RFP, including, but not limited to the “Professional Services Agreement” attached to the RFP as Attachment 1.

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APPENDIX A:

RESUMES OF KEY

PERSONNEL

COMPREHENSIVE WATER AND

WASTEWATER RATE STUDY

REQUEST FOR PROPOSALS
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Item 22.
900 Bestgate Rd., Ste. 402
Annapolis, MD 21401
[email protected]
www.newgenstrategies.net
Bachelor of Arts in Economics and
Mathematics, Johns Hopkins University
American Water Works Association –
Active member of the AWWA Rates and
Charges Committee and Cost of Service
Subcommittee
Cash Flow Sensitivity Analysis
Econometrics
Economic Impact Analysis
Financial Modeling
Public Finance
Utility Management
Utility Rate and Fee Design
Water and Wastewater Cost of Service
Analyses
Mr. Eric Callocchia has 13 years of utility cost of service and financial consulting experience. His expertise involves a broad range of industry issues, including revenue stability, customer affordability, cost of service rate making, and public engagement and education. His expertise in utility cost of service is rooted in his exceptional analytic skills and broad experience, which ensure that the recommendations he develops are understandable and withstand legal scrutiny.

Mr. Callocchia is a contributing author to the most recent edition of the Water Environment Federation’s Manual of Practice 27 – Financing and Charges for Wastewater Systems. He is an active member of the American Water Works Association (AWWA) Rates and Charges Committee and a contributing author to the upcoming eighth edition of AWWA’s Manual M1 – Principles of Water Rates, Fees, and Charges.

Mr. Callocchia provides water, wastewater, and stormwater industry expertise and policy guidance to NewGen’s clients. His rate study approach involves the development of customized financial models that focus on the policy issues, cash needs, revenue requirements, and key performance indicators of each client. His models equip clients with the necessary information to make critical capital financing decisions and rate adjustments to finance their system’s operation, asset maintenance, and replacement needs while maintaining fund balance policies based on industry best practices. The models also have the capability of scenario analysis and can be incorporated with operating and capital expense and revenue projects. Mr. Callocchia develops and recommends alternative rate structures and assists with implementing phased-in rate plans that address client issues and maintain the financial health of utility funds.

Mr. Callocchia also provides expert guidance on managing water, sewer, and stormwater utilities, including developing policies and procedures related to customer service, organizational communication, and public outreach.

Clients that Mr. Callocchia has provided these services include:
▪ Albemarle County, VA
▪ Anne Arundel County, MD
▪ Bloomington and Normal Water
Reclamation District, IL
▪ City of Annapolis, MD
▪ City of Brea, CA
▪ City of Charlottesville, VA
▪ City of Concord, CA
▪ City of Dover, DE
▪ City of Falls Church, VA
▪ City of Frederick, MD
▪ City of Fredericksburg, VA
▪ City of Hagerstown, MD
▪ City of Hampton, VA
▪ City of Naperville, IL
▪ City of North Kingstown, RI
▪ City of Park Ridge, IL
▪ City of Portsmouth, VA
▪ City of Prospect Heights, IL
▪ City of Richmond, VA
▪ City of Rockville, MD
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Item 22.
▪ City of Salisbury, MD
▪ City of Westminster, MD
▪ Coachella Valley Water
District, CA
▪ Delaware County Regional
Water Quality Control
Authority (DELCROA), PA
▪ Frederick County, MD
▪ Jericho Water District, NY
▪ Jurupa Community Services
District, CA
▪ King George County Service
Authority, VA
▪ Loudoun Water, VA
▪ Rivanna Water and Sewer
Authority, VA
▪ Somerset County Sanitary
District, MD
▪ Town of Barnstable, MA
▪ Town of Colonial Beach, VA
▪ Township of East
Brunswick, NJ
▪ Town of Elkton, MD
▪ Town of Fairfield WPCA, CT
▪ Town of Herndon, VA
▪ Town of Lovettsville, VA
▪ Town of Middleburg, VA
▪ Town of Pound, VA
▪ Town of Purcellville, VA
▪ Town of Wallingford, CT
▪ Town of Vienna, VA
▪ Village of Addison, IL
▪ Village of Fox Lake, IL
▪ Village of Libertyville, IL
▪ Village of Lindenhurst, IL
▪ Village of Lombard, IL
▪ Village of Orland Park, IL
▪ Village of Westchester, IL
▪ Washington Suburban
Sanitary Commission, MD
▪ Wise County Public Service
Authority, VA
In 2019, the Village engaged NewGen to complete a feasibility study to project the costs of implementing a Master Stormwater Management Plan (MSM) and to determine the appropriate methodology to charge Village citizens the fees for the MSM-planned projects. The Village also tasked NewGen with developing credit policies and manuals, appeal procedures, and an appropriate Stormwater Ordinance. Mr. Callocchia developed a financial model that projected the twenty-year cost of the Village’s MSM and the various impervious area-based cost allocation methods the Village could adopt as a funding mechanism. Mr. Callocchia’s feasibility study allowed Village staff and elected officials to evaluate the various stormwater funding alternatives and implement industry best practices for the administration of its stormwater management program. Mr. Callocchia finalized the impervious area and utility billing databases. He also coordinated with Village staff to develop an interactive online fee lookup tool that allowed Village citizens to see their potential stormwater fee before it became effective. Mr. Callocchia also worked with Village staff to conduct two Town Hall-style public information sessions before the fee became effective.

The City of Westminster serves as the County Seat. It is in the center of Carroll County, conveniently located near Maryland’s largest cities, two state capitals, Annapolis and Harrisburg, and the nation’s Capital. The City had historically faced challenges when funding stormwater operations and capital costs. In the past, the City had not accounted in a detailed fashion for the actual stormwater management costs, with most of the costs absorbed by the City’s streets and road maintenance accounted for in the General Fund. The City engaged NewGen in 2019 to complete a feasibility study with several tasks:
▪ Identify and isolate the actual cost of stormwater maintenance.

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Item 22.
▪ Develop and recommend a ten-year stormwater CIP given the City’s asset listing and future stormwater needs.
▪ Recommend policies regarding stormwater fees and credits. ▪ Engage in a public information campaign to educate the City’s citizens on the need for additional resources for stormwater management.
▪ Assist in implementing a Stormwater Utility that properly accounts for the City’s stormwater costs.

Mr. Callocchia developed a financial model detailing the City’s stormwater costs and helped the City implement a stormwater fee tied to the account information of City sewer users.

Frederick County, Maryland, was anticipating the issuance of a Municipal Separate Storm Sewer System (MS4) Permit from the Maryland Department of the Environment (MDE) that would place a particular cost burden on the County’s 48,000 stormwater fee payers. Mr. Callocchia developed a financial model that determined the Maximum Extent Practicable (MEP) level the County could reasonably fund, given current funding levels, median household income, and the County’s procurement limitations. Mr. Callocchia’s financial model allowed for a sensitivity analysis to determine the possible increase in funding given several factors. The County used Mr. Callocchia’s analysis to appeal the permit requirements and reduce the financial impact on the County’s customers by reducing the mandated spending related to the permit and lengthening the required implementation timeframe.

The City of Geneva was actively involved in developing the Kane County Stormwater Management Ordinance in 1998. Geneva became a “certified community” in 2001 by adopting the final version of the City’s stormwater ordinance. The Lake County Stormwater Management Commission provided a template that was the basis of the City’s Stormwater Management Program Plan (SMPP). The plan aimed to meet the minimum standards required by the U.S. Environmental Protection Agency (EPA) under the National Pollutant Discharge Elimination System (NPDES) Phase II program.

Mr. Callocchia led a team that conducted a financial analysis as a part of a Citywide Watershed Study. The City supported the drainage and stormwater-related costs through its General Fund. His role in the Watershed Study was to support and participate in the initial City staff meeting to establish a City Vision document. Mr. Callocchia also identified current grants and funding sources and developed funding strategies to facilitate the City’s Public Works Department’s capital and operational needs related to their drainage infrastructure responsibilities. He recommended funding gap strategies associated with an annual program and budget. Mr. Callocchia also participated in and supported a City Council strategic planning workshop on the topic related to the Citywide Stormwater Report and financial perspectives.

Mr. Callocchia developed a water and sewer rate model for the City of Annapolis, Maryland that projected various debt scenarios, including bond coverage calculations and cash-on-hand target projections. The City was able to generate ratings of AA-, Aa3, and AA- from the three major rating agencies and issue revenue bonds totaling $30,755,000 on schedule, thanks to the feasibility report generated by Mr. Callocchia’s team.

Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

Item 22.

Silgan Plastics is the leading manufacturer of metal containers in North America and Europe and the largest manufacturer of metal food containers in North America, with a volume of approximately half the market share in the United States of America. They are also a leading worldwide manufacturer of metal, composite, and plastic closures for food and beverage products. Mr. Callocchia led a team to evaluate the utility rate charges for a selection of Silgan’s manufacturing plants and assisted Silgan in settling rate disputes with local utility providers.

Mr. Callocchia’s detailed evaluations and expert analysis resulted in a settlement agreement for more than $500,000 above the amount offered to Silgan before Mr. Callocchia’s involvement.

The San Diego County Water Authority (SDCWA) and The Metropolitan Water District of California (MWD) were engaged in litigation regarding the water rates charged to SDCWA by MWD. Mr. Callocchia developed a report on MWD’s rate-setting methodology and how it relates to the principles and industry standard practices detailed in the American Water Works Association (AWWA) Manual M1 - Principles of Water Rates, Fees, and Charges.

Mr. Callocchia’s evaluation assisted SDCWA in showing the illegality of MWD’s rates based on their nonconformity to AWWA standards and California Law (Proposition 26). Mr. Callocchia’s work involved cost-of-service analysis and knowledgeable explanation of industry standards to the Superior Courts of California. After Mr. Callocchia’s report, a judge ruled in favor of the Water Authority, saying MWD’s rates for 2011-2014 were illegal and awarded SDCWA $235 million. Upon appeal, the appellate court ruled in favor of MWD on one of twelve issues. The California Supreme Court denied a petition by SDCWA to review the appellate court ruling. The results of the dispute in which Mr. Callocchia was involved as an expert were:
▪ MWD must pay the Water Authority approximately $51 million for the so-called “Water Stewardship” charges that MWD added to the transportation rates it charged the Water Authority from 2011-2014.

The decision prevents MWD from imposing more than $20 million in illegal charges annually in the future. By 2047, those unlawful charges would have amounted to approximately $1.1 billion. ▪ MWD unlawfully under-calculated the Water Authority’s statutory water rights to MWD’s water supply. ▪ A contract clause MWD used to disqualify local water supply projects in San Diego County from receiving funding from MWD was unconstitutional.
▪ Engage in a public information campaign to educate the City’s citizens on the need for additional resources for stormwater management.
▪ Assist in implementing a Stormwater Utility that properly accounts for the City’s stormwater costs.

The City of Westminster, Maryland, was sued by a new customer who alleged that the methodology used by the City to calculate its water and sewer benefit assessments, commonly known in the utility industry as System Development Charges, was unlawful. Mr. Callocchia was an expert witness detailing the industry standard methodologies used to calculate these fees and provided the Court with the rationale and basis for the City’s fees. The Court ultimately found that the City’s fees were not illegally calculated based on the City’s testimony, which included Mr. Callocchia’s expert witness statements.

Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

Item 22.
▪ WEF Manual 27, Financing and Charges for Wastewater Systems, Contributing Author ▪ Setting Water and Sewer Rates in New York State While Addressing the Challenges of 2020 New York State GFOA 2020 Northeast Holiday Seminar, 2020 ▪ Setting Water and Sewer Rates
New York State GFOA 38th Annual Conference, 2017
▪ A World without Crystal Balls: Attempting to Forecast Operating Expenses Tri-Association Conference, 2016
▪ Enhanced General Fund Reimbursement by Enterprise Funds Brown Edwards Conference, 2014
Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

Item 22.
275 W. Campbell Road, Suite 440
Richardson, TX 75080
[email protected]
www.newgenstrategies.net
Bachelor of Science, Electrical
Engineering, University of Central Florida
United States Naval Nuclear Power
Program
AWWA’s National Rates and Charges
Committee
Finance, Accounting and Management
Committee
Asset Planning and Management
Cost of Service and Rate Design
Economic Feasibility Studies
Financial Modeling
Valuation Studies
Mr. Richard Campbell with over 36 years of experience in the industry, previously serving as the Financial Services Director of Freese and Nichols. He has led several complex electric, natural gas, and water/wastewater utilities projects.

Mr. Campbell is an expert in a full range of utility finance issues, including debt issuance support (revenue bond feasibility); valuation studies for acquisitions and mergers; alternative capital financing analyses; economic feasibility studies; wholesale and retail ratemaking/cost of service; impact fee/system development fee analysis; asset planning and asset management; development of renewal and replacement programs; and strategic and business planning.

Mr. Campbell has led and assisted with financial evaluations for water, wastewater, stormwater, and sewer utilities to safeguard their financial integrity through comprehensive cost of service analyses, including wholesale services.

Mr. Campbell has participated in water, wastewater, stormwater, and/or sewer cost of service and rate design studies for the following entities, to name a few:

Mr. Campbell has led or assisted in impact fee analysis to assist communities in setting the most appropriate fee amounts using a more comprehensive credit calculation. His clients include:
▪ Allegheny County Sanitary
Authority
▪ City of Brownsville, TX
▪ City of Columbia, SC
▪ City of Dallas, TX
▪ City of Duncan, OK
▪ City of Garland, TX
▪ City of Grand Prairie, TX
▪ City of High Point, NC
▪ City of Lawton, OK
▪ City of Pittsboro, NC
▪ City of Raleigh, NC
▪ City of Round Rock, TX
▪ City of Siler City, NC
▪ City of Stephenville, TX
▪ Fort Worth Water
▪ Jacksonville Electric Authority
▪ Miami-Dade County Water and
Sewer Department
▪ NBU, New Braunfels, TX
▪ San Antonio Water System
▪ City of Brownsville, TX
▪ City of Columbia, SC
▪ City of Irving, TX
▪ City of Shreveport, LA
▪ City of Wilmer, TX
▪ Fort Worth Water
▪ Jacksonville Electric Authority
▪ New Braunfels Utilities, TX
Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

Item 22.

Mr. Campbell has also led other projects, including:

Mr. Campbell served as the Project Manager for multiple bond feasibility studies in 2004, 2006, 2008, 2010, and 2014 for the City of High Point for inclusion into official statements for Revenue Bond issuances totaling greater than $176 million to fund water and sewer capital improvements.

In 2017, the Miami-Dade County WASD issued Revenue Bonds totaling $929,380,000. Mr. Campbell was the Project Manager responsible for developing the required issuance of a Consulting Engineer’s Report and the associated financial feasibility study. Based upon the requirements of existing bond ordinances, the Water and Sewer Department must have the system inspected, in its entirety, every three years. Arcadis performed this work, and the results are incorporated as a part of the CE report for inclusion in the bond issuance official statement, as are the results of the feasibility study, which attests to the financial well-being of the system and its ability to meet the needs of its customers and the additional financial burdens of the new bond issue.

As Project Manager, Mr. Campbell was responsible for developing a detailed and comprehensive financial planning model to help the Allegheny County Sanitary Authority (ALCOSAN) determine the financial impact of eliminating sewer overflows from the 83 municipalities in its wastewater treatment service area. The model helped ALCOSAN compare multiple capital spending scenarios associated with various Wet Weather Plan options, cash financed capital, bond issuances, and rate increases over a 30-year forecast period. Mr. Campbell was also responsible for developing a cost of service and rate design model that helped ALCOSAN determine the cost of providing service to its customers and various rate design options that would enable them to recover these costs through user rates.

Mr. Campbell served as Project Manager for a water/wastewater Inside-City/Outside-City rate differential study to determine fair and equitable rates applicable to outside-city customers. This process required a cost-of-service evaluation to allocate proper costs to various rate classes based on a pre-determined test.

Mr. Campbell served as Project Manager in working with the City to evaluate its wastewater facilities and develop an asset management program to assist in tracking and maintaining the records and database of the system assets.

Mr. Campbell served as Project Manager and provided the City of Raleigh’s Stormwater Department with an interactive, Windows-driven financial model to assist staff in budgeting and projecting expenditures and revenue needs and rate-setting capabilities. The process allowed staff to track operational targets and provided reporting capabilities for operations staff and upper-level management.

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Item 22.

Mr. Campbell served as Project Manager for a Revenue Bond feasibility study in 2008 for the City of Raleigh’s Stormwater Division for inclusion into an official statement for a Revenue Bond issuance to fund capital improvements for the system.

Mr. Campbell served as Project Manager/Client Coordinator for an analysis of the financial impact of switching current billing practices to operate every month from a bi-monthly basis. Included in this analysis was the potential impact on the system and its customers should the City pursue varying levels of improved technologies in the billing and metering processes.

Mr. Campbell served as Project Manager for multiple bond feasibility studies in 2006 and 2008 for the City of Raleigh for inclusion into official statements for Revenue Bond issuances totaling greater than $410 million to fund water and sewer capital improvements, as well as for refunding of existing debt.

As Project Manager, Mr. Campbell provided the City of Raleigh with a financial analysis model that allowed the City to determine its current financial operational standing concerning its water and sewer utilities. The project also projected the impact on the City’s financial position from proposed future Capital Projects and provided funding for these potential projects. This analysis model provided the City with a management tool that allows the City to consider several scenarios and test sensitivities for various growth scenarios and the timing and funding sources of anticipated capital projects.

Mr. Campbell served as Project Manager on the Evaluation of Regionalization Alternatives for the Orlando Utilities Commission (OUC), which focused on developing a regional plan for using reclaimed water to augment the withdrawal of groundwater by local water utilities. The analysis evaluated various system configurations relative to the City of Orlando’s wastewater system to identify the most economically and fiscally prudent means of transporting 9.2MGD of reuse water to the Northwest Orange County area.

Mr. Campbell managed the development of a financial and rate analysis model for the electric, natural gas, water, and sewer utility operations of the Laurens Commission of Public Works (CPW) to assist the CPW Commission and staff in their ongoing evaluation of the present and projected financial status of the total CPW utility system operations and the stand-alone financial status of each of its four utility system operations. The model utilized recent historical and current budget data to project or forecast the cost of service or revenue requirements of each utility system operation for six years. The model results indicated the level of rate adjustments necessary to meet the total CPW revenue requirement and the cost-based revenue requirements of each utility system operation on a stand-alone basis. Since the CPW’s operations and financial status are subject to scrutiny by outsiders who have a direct or indirect financial interest in the CPW’s operations, annual revenue requirements are calculated based on both the minimum cash requirements established by the CPW’s bond resolutions and rate ordinances and the regulated utility rate-base/rate-of-return method. The model also produced annual financial and operating ratios, which rating agencies rely on to evaluate the financial status of a municipal utility operation.

Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

Item 22.

ZAK C. WRIGHT
Senior Manager
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net

CONTACT
49 Music Square West, Suite 505
Nashville, TN 37203
[email protected]
www.newgenstrategies.net

EDUCATION
Master of Business Administration,
Belmont University
Bachelor of Business Administration in
Finance, University of Tennessee
Knoxville

PROFESSIONAL REGISTRATIONS/

CERTIFICATIONS/COMMITTEES
Accredited Senior Appraiser (ASA) by the
American Society of Appraisers
Certified Depreciation Professional (CDP)
by the Society of Depreciation
Professionals
Certified Rate of Return Analyst (CRRA) by
the Society of Utility and Regulatory
Financial Analysts

KEY EXPERTISE
Appraisals and Valuation
Contract and Formula Rate Review
Cost on Equity/Rate of Return Filings
Cost of Service and Rate Design
Depreciation Studies
Financial Feasibility Analysis
Financial Planning & Budgeting Models
Municipalization Feasibility Analysis
Power Supply Planning
Rate Benchmarking & Analysis
Mr. Zak Wright performs appraisals, depreciation studies, rate of return analysis, financial forecast analysis, financial analyses, and cost of service and rate design studies for electric, natural gas, water, and wastewater utilities. Before joining NewGen, he worked as a Commercial Credit Analyst and has experience in corporate finance, pro forma financial analysis, financial modeling, underwriting, banking, and strategic and capital planning. He attained his Master of Business Administration from the Massey School of Business at Belmont University. Mr. Wright is an Accredited Senior Appraiser (ASA), Machinery and Technical Specialties by the American Society of Appraisers, a Certified Depreciation Professional (CDP) by the Society of Depreciation Professionals, and a Certified Rate of Return Analyst (CRRA) by the Society of Utility and Regulatory Financial Analysts.

RELEVANT EXPERIENCE
Appraisals and Valuation
Mr. Wright has conducted valuations and fair market value appraisals to determine an indication of value for acquisitions/dispositions or to evaluate municipalization or privatization of utilities. His experience also includes service area valuations to assess compensation for decertification of areas covered by certificates of convenience and necessity.

Water and Wastewater Systems
 Abby Plantation DBA Louisiana
Sewer Utilities
 Aqua Texas
 Bickerstaff heath Delgado
Acosta LLP
 Canyon Lake Water Service
Company
 Carteret County, NC
 City of Lawrenceville, GA
 Clifford, Ross, Raudenbush &
Cooper, LLC, AZ
 Conrad Consulting &
Training LLC, IN
 CSWR Texas – Carroll Water
Company
 CSWR Texas – City of Ferris, TX
 CSWR Texas – Douglas Utility
Company
 CSWR Texas – Lake Limestone
Coves
 CSWR Texas – Leon Springs
 CSWR Texas – North Orange
 CSWR Texas – Northside
Subdivision Water Plant and
Distribution Corp.
 CSWR Texas – Patterson Water
Supply
 Dentons Bingham Greenebaum LLP
 Gregg Law PC
 King George County Service
Authority, VA
 Monarch I, LP – Woodland Oaks
 Nexus Water Group – Crystal
Springs Water Company, Inc.
 Public Utility Commission of Texas
 Sands Anderson, PC
 Scurry County, TX
 SouthWest Water, Inc.
 Texas Water Utilities – Arroyo Doble
Water System
 Texas Water Utilities – NextEra
Water Texas
 Town of Lexington, SC
 York Water Company
Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

Item 22.

ZAK C. WRIGHT
Senior Manager
Thoughtful Decision Making for Uncertain Times 2
Power Generation Assets
 CPS Energy, TX
 Greer, Herz & Adams, LLP, TX
 MWH America, Inc.
 Robbins Schwartz
 Somervell County Appraisal
District, TX
 Williams Mullen
Hydro-electric Generation Assets
 City of Hamilton, OH
 Dentons Bingham
Greenebaum LLP
 Hudson River-Black River
Regulating District
 Walden Environmental
Engineering
Coal Generation Assets
 Robbins Schwartz
 Rusk County Appraisal
District, TX
 Shawnee Community Unit
School District 84
 Tri-State G&T Association, CO
Power Distribution Assets
 City of Harrisonburg, VA
 Dairyland Electric Cooperative
 HDR – Bureau of Indian Affairs
 MWH Corporation, TN
 Middle Tennessee Electric
Membership Corp
Oil Refining Facilities
 Greer, Herz & Adams, LLP, TX
Gas Assets
 City of Rockport, TX
Power Transmission Assets
 City of Abilene, TX  Dairyland Power Cooperative,
WI
Streetlight and Lighting Assets
 City of Kileen, TX
Waste-to-Energy Facilities
 City of Lisbon, CT  Onandaga County Resource
Recovery Agency, NY
Power Supply Contracts
 Basic Management, Inc., NV
Solar Assets
 Parker Gentry & Parker, Inc.

CCN Decertification
 Bickerstaff Heath Delgado
Acosta LLP, TX
 Gregg Law PC, TX
 Lloyd Gosselink Rochelle &
Townsend, PC
 Mustang/Marilee SUD, TX
 Public Utility Commission of
Texas
Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

Item 22.

ZAK C. WRIGHT
Senior Manager
NewGen Strategies and Solutions, LLC 3
Depreciation Analyses and Studies
Mr. Wright conducts and assists in Depreciation Studies to determine the estimated useful life span and depreciation parameters of utility assets. These studies include:
 Bryan Texas Utilities
 City Light & Power, WA
 CPS Energy, TX
 Kauai Island Utility
Cooperative, HI
 Los Angeles Department of
Water and Power, CA
 Lubbock Power & Light, TX
 New Braunfels Utilities, TX
 Tri-State G&T Association, CO
Cost of Service and Rate Design
Mr. Wright conducts and assists with wholesale and retail cost of service and rate design studies for electric distribution, natural gas distribution, and water and wastewater utilities to help them understand the operational and financial impacts of their residential and commercial services. These studies include creating wholesale and retail rate models in Microsoft Excel that are customized to meet the needs of each client. Many of these studies also included the creation of complex databases from Advanced Metering Infrastructure (AMI) datasets to support the wholesale and retail models.

His clients include:
 City of Bonham, TX
 City of Gatesville, TX
 City of Justin, TX
 City of Lewisville, TX
 City of Mansfield, TX
 City of Marshall, TX
 City of Mt. Pleasant, TX
 City of Paris, KY
 City of Nicholasville, KY
 City of Niles, OH
 City of Springfield, MO
 Coachella Valley Water District,
CA
 Corbin Utilities Commission, KY
 Fox Metro Wastewater
Reclamation District, IL
 Princeton Electric Plant
Board, KY
 South Toledo Bend Water
District, Many, LA
 State of Louisiana – Office of
Community Development
 Village of Greenport, NY
 Village of Orland Park, IL
Financial Planning & Budgeting Models
Mr. Wright develops comprehensive financial models to streamline utility rate design studies and determine the optimal level of funded debt and capital investment within various budget, usage, and customer base scenarios. His clients include:
 City of Charlottesville, VA
 City of Denton, TX
 Fayetteville Public Works
Commission, NC
 City of Georgetown, KY
 Cleveland Public Power, OH
 Fairbanks Natural Gas / Interior
Gas Utility, AK
 Kentucky Municipal Energy
Agency, KY
 Neel-Schaffer, Inc. (City of
Biloxi), MS
Rate Benchmarking
Mr. Wright benchmarks competitors’ rates against the client’s rates to determine costs based on several factors, including specific usage patterns and customer classes. He developed recommendations on the potential rate design. His benchmarking clients include:
 City of Bardstown, KY
 City of Nicholasville, KY
 CPS Energy, TX  Mayfield Electric and Water
Systems, KY
Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

Item 22.

ZAK C. WRIGHT
Senior Manager
Thoughtful Decision Making for Uncertain Times 4
Rate Analysis
Mr. Wright analyzed the impact of fluctuating natural gas and funded debt prices on the economic viability of constructing a natural gas distribution system and utility in Alaska. He assessed the customer conversion rate and its impact on the utility’s ability to deliver gas at a lower price. Mr. Wright also reviewed the rate for Cumberland River Southeastern Power Administration (SEPA) end-use customers. The assessment helped illustrate to the power administration that building a 50-year rate that included the cost of all potential capital improvement projects during that period would make the power unmarketable to these customers. This analysis helped encourage the power authority to incorporate a compromise true-up approach into their rate design.
 Cumberland River Southeastern
Power Administration (SEPA)
customers
 Stantec (Interior Gas Utility), AK
Municipalization Feasibility Analysis
Mr. Wright compiled demographic information from comparable municipal electric districts to approximate customer base, usage, and revenue information to support the client’s investigation into forming a municipal electric system. He utilized the compiled data and the most recent incumbent utility’s cost of service data to develop a financial model assessing the financial feasibility of this undertaking and its economic impact on the city and its residents. Mr. Wright’s municipalization projects include:
 City of Spearfish, SD
Contract and Formula Rate Review
Mr. Wright reviews annual rate formulas to ensure they comply with settlement agreements between a group of municipal utilities and an investor-owned utility (IOU). He also verifies that settlement formulas and calculations that the IOU filed with the Federal Energy Regulatory Commission (FERC) accurately determined the monies due to the cities. Mr.

Wright’s clients include:
 City of Bardwell, KY
 City of Nicholasville, KY
 City of Paris, KY
 Kentucky Municipal Energy
Agency, KY
 Kentucky Municipal Group, KY
Power Supply Planning
Mr. Wright reviews requests for proposal responses and develops a common-size expense model to determine the allin cost of each respondent’s proposal. He also supports the development of the project award recommendation. His projects include:
 City of Bardwell, KY
 City of Paris, KY
 Kentucky Municipal Energy
Agency, KY
 Kentucky Municipal Group, KY
Franchise Fee Analysis
Mr. Wright developed a database to test the accuracy of franchise fee payments to a group of cities in Texas. He manipulated approximately 40GB flat file of raw data from discovery into models that tested for under-recovery for cities and provided defensible results.
 Lloyd Gosselink Rochelle &
Townsend, PC
Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

Item 22.

Tia Carnes
Senior Consultant
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net

CONTACT
225 Union Blvd., Ste 450
Lakewood, Colorado 80228
[email protected]
www.newgenstrategies.net

EDUCATION
Master of Business Administration,
Belmont University
Bachelor of Science in Bible/Biblical
Studies, Cairn University

KEY EXPERTISE
Appraisals and Valuation
Cost of Service and Rate Design
Financial Planning & Budgeting Model
Organizational Effectiveness
Rate Benchmarking & Analysis
Ms. Tia Carnes joined the firm as a Consultant in February 2020. During her tenure, she has provided financial modeling, appraisal/valuation support, cost of service and rate design analyses, and most notably, support to the organizational review and workshop development projects. Her experience includes leadership training and development, team assessment, and financial analysis. Ms. Carnes came to NewGen with a strong background in customer service, logistics, and high-volume task management.

RELEVANT EXPERIENCE
Cost of Service and Rate Design
Ms. Carnes performs cost of service and rate design studies for electric, wholesale, and retail water, reclaimed water, wastewater, drainage, and natural gas utilities. She assists clients in understanding their service offerings’ financial and operational impacts and develops rates intended to fully recover operating costs. Her clients include:

Organizational Effectiveness
Ms. Carnes conducts a high-level review of an organization to determine best practices, areas for improvement, and recommend solutions. Her contributions include analysis of survey results determining the organizational health of the client and facilitating workshops to build team skills and organizational effectiveness. Her clients include:

Appraisals and Valuation
Ms. Carnes performs appraisal analyses to develop value indicators using the income, cost, and market valuation approaches. Her appraisal projects include:

Power Generation Assets
Power Distribution Assets
▪ City of Austin, TX
▪ City of Brea, CA
▪ City of Charlottesville, VA
▪ City of Coachella Valley, CA
▪ City of Corpus Christi, TX
▪ City of Henderson, KY
▪ City of Lewisville, TX
▪ City of Maryville, MO
▪ City of Orland Park, IL
▪ City of Springfield, MO
▪ City of Waco, TX
▪ City of Austin, TX
▪ City of Denton, TX
▪ CPS Energy, TX
▪ DEMCO, LA
▪ Somervell County Appraisal
District, TX
▪ Robbins Schwartz
Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

Item 22.

TIA CARNES
Senior Consultant
Thoughtful Decision Making for Uncertain Times 2
▪ City of Harrisonburg, VA
Water and Wastewater Systems
▪ Town of Lexington, SC
Power Supply Contracts
▪ Basic Management, Inc., NV
Other Projects
Public Power Feasibility
▪ City of San Diego, CA
Facilities Rates Study
▪ City of Phoenix, AZ
Community Engagement
▪ City of Redding, CA
Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

Item 22.

AIDAN OATES
Consultant
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net

CONTACT
900 Bestgate Road, Suite 402
Annapolis, Maryland 21401
[email protected]
www.newgenstrategies.net

EDUCATION
Master of Energy Management, Tulane
University
Bachelor of Arts in English Literature and
Finance, The College of William and Mary

KEY EXPERTISE
Cost of Service and Rate Design
Financial Planning & Budgeting Model
Renewable Energy Equity
Mr. Aidan Oates joined NewGen in 2021, providing financial modeling, cost of service, and rate design assistance. His experience includes valuation, trading, economics, and investment banking specific to the Energy industry.

RELEVANT EXPERIENCE
Cost of Service and Rate Design•
Mr. Oates works with NewGen project managers to build financial models for utility clients. These models utilize industry-standard cost allocation methodologies and allow clients to project their systems’ operating, capital, debt service, and reserve requirements on both a short and long-term basis.

Mr. Oates provides expert utility billing analysis to project utility revenues properly. Clients to whom Mr. Oates has provided these services include:

PRIOR RELEVANT EXPERIENCE
Heikkinen Energy Advisors
Equity Research Associate
 Began the renewable energy equity research division by initiating coverage of several renewable companies operating in different industry subsectors.  Built financial models to determine the inherent value of businesses operating in various renewable segments, including biomass production, sustainable utility generation, solar inverter manufacturing, battery distribution, and solar installation.
 Updated the models for mergers, acquisitions, debt and equity offerings, and general industry developments.
 Performed market research, valuation alterations, and quarterly report updates for publication.
 Created a system of comparing reporting across solar installation companies.

Thompson Financial Group
Financial Advisory Associate
 Balanced, designed, and reconstructed individual portfolios based on weighted risk tolerance considerations, market factors, and investment horizon.
 Led a team of new representatives to analyze modern sales trends and the effect of keyword marketing on specific territories within several archetypal Maryland markets.
 Albemarle County Service
Authority, VA
 Bloomington and Normal Water
Reclamation District, IL
 City of Brea, CA
 City of Frederick, MD
 Coachella Valley Water
District, CA
 Town of Barnstable, MD
 Township of Hamilton, NJ
 Town of Middleburg, VA
 Village of Orland Park, IL
Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

Item 22.

ALEX ROBINSON
Consultant
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net

CONTACT
900 Bestgate Rd., Ste. 402
Annapolis, MD 21401
[email protected]
www.newgenstrategies.net

EDUCATION
Bachelor of Arts in Political Science and
Economics, Johns Hopkins University

KEY EXPERTISE
Data Analysis
Financial Modeling
Cost of Service and Rate Designs
Ms. Alex Robinson joined NewGen as a full-time Consultant in November 2023.

She assists on cost of service and rate design projects, performing data evaluations and applying her financial modeling skills. Ms. Robinson’s experience includes economic analysis and rate studies.

RELEVANT EXPERIENCE
Cost of Service & Rate Design – Water & Wastewater
Ms. Robinson assists with cost of service and rate design studies for water and wastewater utility clients. She conducts billing and usage analysis, as well as proforma development to project utility systems’ operating expenses, capital investments, debt service, and revenue requirements. Ms. Robinson’s financial forecasts, utility analyses, and bill comparisons provide her clients with an extensive overview of rate recommendations that promote successful budgeting and longterm growth.

Ms. Robinson’s cost of service and rate design clients include:

PRIOR RELEVANT EXPERIENCE
ERC Data Analyst
Frost Law
▪ Verified and updated account source documents for the Employee Retention Credit, a COVID-response tax refund for small businesses. ▪ Input businesses’ financial statements, payrolls, and loan forms into firm’s database and Excel spreadsheets to calculate qualifications. ▪ Evaluated customers’ ERC eligibility and produced summary reports for supervisor.
▪ Reviewed peers’ data calculations for deficiencies to ensure group accuracy and efficiency.
▪ City of Maryville, MO
▪ City of St. Peters, MO
▪ City of Westminster, MD
▪ Town of Barnstable, MA
▪ Town of Ocean City, MD
▪ Township of Vernona, NJ
▪ United Water System, LA
▪ Village of Niles, IL
▪ Village of Northbrook, IL
▪ Village of Simpson, LA
Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

Item 22.

THANK YOU!
900 Bestgate Road, Ste. 402, Annapolis, MD 21401
Phone: (443) 951-4207
Email: [email protected]
www.newgenstrategies.net
Docusign Envelope ID: 5A0AF2D5-0C28-4C2E-B7CB-B482237F0D63

Item 22.

RFP SCORING CONSOLIDATION
RFP Title Cost of Service Study (Water/Wastewater)

PROPOSER PROPOSER PROPOSER
Black & Veatch NewGen Raftelis
EVALUATOR 1 83 85 83
EVALUATOR 2 82 100 82
EVALUATOR 3 87 93 90
EVALUATOR 4
Total 252 278 255

Item 22.

STAFF REPORT
1/22/2025
TO: Honorable Mayor and City Council Members
FROM: Celina Jimenez, Director of Economic Development
SUBJECT: Authorize the City Manager to Execute a Professional Services Agreement with Keyser Marston Associates, Inc. (KMA) for a Hotel Site Feasibility Study in the Amount of $79,500
STAFF RECOMMENDATION:

Staff recommends that the City Council consider authorizing the City Manager to execute a Professional Services Agreement with Keyser Marston Associates, Inc. (KMA) to conduct a Hotel Site Feasibility Study in the amount of $79,500. Previously, the Economic Development and Planning Subcommittee reviewed and recommended the item for City Council consideration at its meeting of December 5, 2024.

BACKGROUND:

In 2022, the Coachella Valley experienced a resurgence in tourism from pre-pandemic levels.

According to HVS, a global hospitality consulting firm, the economic impact from direct visitor spending totaled $8.7 billion with 30% of this spending dedicated to lodging, including hotels and short-term rentals. Tourism growth in the Coachella Valley is also supported through the increased availability of air travel. In 2020, Southwest Airlines initiated year-round air service to the Palm Springs International Airport (PSP). In addition, large gathering venues such as the opening of the 11,000-seat Acrisure Arena, are likely to attract day and overnight visitors to the Coachella Valley.

The Arena plans to host over 120 major events annually, likely to increase both hotel occupancy and Average Daily Rates (ADR) within the Coachella Valley. The City is hoping to capture the growing tourism, meetings, and special events in the Coachella Valley with the development of the City’s first hotel.

DISCUSSION/ANALYSIS:

The purpose of this feasibility study is to identify potential hotel site location within the City of Coachella. The study will also help attract prospective hoteliersto the City, which could ultimately culminate in an increase in Transit Occupancy Tax (TOT) revenue for the City.

Item 23.

Below is an overview of the proposed scope of services:
 Phase 1: Initiation/Stakeholder Surveys – At the outset of the assignment, KMA will participate in a meeting with City staff and Visit Greater Palm Springs.  Phase 2: Hotel Market Assessment – KMA will conduct a market assessment of hotel development potential in eastern Riverside County (County); the eastern Coachella Valley trade area (Trade Area); neighboring cities such as Indio, La Quinta, and Palm Desert (Neighboring Cities); and the City and its Sphere of Influence (SOI).  Phase 3: Financial Feasibility – KMA will undertake financial feasibility analyses of up to three (3) prototypical hotel development prototypes to be considered in the City. Subject to the findings of the market assessment, one or more of these prototypes may include a mix of uses or ownership formats such as residential, condotel, or timeshare.  Phase 4: Financing Approaches – to supplement the financial feasibility analysis, KMA will evaluate various levels of financing approaches that will incentivize hotel development within the City, including, but not limited to: TOT sharing, tax-exempt bonds, grants and subsidies, and tourism and entertainment districts. This evaluation will consider comparable hotel financing structures such as the tax-exempt and taxable revenue bonds utilized to construct Hotel Polaris in Colorado Springs, Colorado.  Phase 5: Findings and Recommendations – KMA will summarize the key findings from the Phase 2 market assessment, Phase 3 financial feasibility analysis, and Phase 4 financing approaches.
 Phase 6: Report and Presentation – KMA will prepare a report to include an executive summary, narrative discussion, and supporting tables and exhibits.

KMA proposes to complete the above scope of services within the total budget requirement of $79,500 and the following tentative timeline:

Phase: Budget Amount:

Phase 1 – Initiation/Stakeholder Survey $6,500
Phase 2 – Market Assessment $25,500
Phase 3 – Financial Feasibility $27,500
Phase 4 – Financial Approaches $4,500
Phase 5 – Recommendations $5,000
Phase 5 – Final Report and City Council Presentation $7,500 Sub-Total (Phases 1-6) $76,500
Add: Reimbursables $3,000
Grand Total $79,500

Item 23.

ALTERNATIVES:

1. Authorize the City Manager to Execute a Professional Services Agreement with Keyser Marston Associates, Inc. (KMA) for a Hotel Site Feasibility Study in the Amount of $79,500

2. Not approve this item
FISCAL IMPACT:

The fiscal impact of this action would be $79,500 and would require an appropriation from the General Fund Reserves (Fund 101).

ATTACHMENTS:

1. Professional Services Agreement (PSA) with KMA Scope of Services Hotel Feasibility Study

2. Proposal - Hotel Feasibility Study to Access Potential Hotel Development in the City

Item 23.

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KMA SCOPE OF SERVICES

HOTEL FEASIBILITY STUDY

CITY OF COACHELLA
I. OBJECTIVE
The City of Coachella (City) seeks economic consulting services for a hotel feasibility study to assess the potential to attract the City’s first hotel development. The City seeks to establish a hospitality market to capture the growth in tourism, meetings, and special events occurring in the larger Coachella Valley.

II. BACKGROUND
In 2022, the Coachella Valley experienced a resurgence in tourism from pre-pandemic levels. According to HVS, a global hospitality consulting firm, the economic impact from direct visitor spending totaled $8.7 billion with 30% of this spending dedicated to lodging, including hotels and short-term rentals.

Tourism growth in the Coachella Valley is also supported through the increased availability of air travel.

In 2020, Southwest Airlines initiated year-round air service to the Palm Springs International Airport (PSP). As a result, additional airlines introduced nonstop services to PSP, for a total of 12 airlines now providing nonstop flights to PSP from 32 destinations. The City of Palm Springs has recently initiated an update to the 2015 Airport Master Plan for the expansion (nearly double the existing capacity) of the PSP to support future demand, continue safe and efficient operations, and address changes in the aviation industry at the local and national level. In addition, large gathering venues such as the opening of the 11,000-seat Acrisure Arena, are likely to attract day and overnight visitors to the Coachella Valley.

The Arena plans to host over 120 major events annually, likely to increase both hotel occupancy and Average Daily Rates (ADR) within the Coachella Valley.

The City is hoping to capture the growing tourism, meetings, and special events in the Coachella Valley with the development of the City’s first hotel. As background, the City is the easternmost city of the Coachella Valley and is one of California’s fastest growing cities. The City is officially bilingual in English and Spanish, with over 90% of the population speaking Spanish. The City hosts popular events such as Cinco de Mayo, the 16 de Septiembre Fiestas Patrias (Mexico’s Independence from Spain), and the 12 de Diciembre to celebrate the Virgin Mary. In addition, the City can potentially benefit from nearby largescale events, such as the Coachella Valley Music and Arts Festival, Stagecoach Festival, BNP Paribas Open, Palm Springs Film Festival, and Tour de Palm Springs. Notably, the Coachella Valley Music and Arts Festival and Stagecoach Festival, both hosted in Indio, have provided additional support for new hotel rooms in Indio.

III. SCOPE OF SERVICES
The following section presents the Keyser Marston Associates, Inc. (KMA) proposed scope of services to conduct a hotel feasibility study for the City.

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(1) Phase 1: Initiation/Stakeholder Surveys – At the outset of the assignment, KMA will participate in a meeting with City staff and Visit Greater Palm Springs. As part of this initial phase, we will:
(a) Review the City’s objectives, review critical background information, identify potential development sites, and discuss key stakeholders to interview. (b) Conduct a field survey and an initial evaluation of potential sites for consideration. This evaluation of potential sites will consider key development factors such as proximity to existing entertainment uses and access to, and/or visibility from, Interstate 10 (I-10) and State Route 86 (SR 86).
(2) Phase 2: Hotel Market Assessment – KMA will conduct a market assessment of hotel development potential in eastern Riverside County (County); the eastern Coachella Valley trade area (Trade Area); neighboring cities such as Indio, La Quinta, and Palm Desert (Neighboring Cities); and the City and its Sphere of Influence (SOI). The market assessment will include:
(a) A profile of demographic and economic trends, including growth in population, disposable income, visitor nights, and retail sales activity. This will contain a review of recently completed and proposed projects in planning within the City, Neighboring Cities, and Trade Area, including recent hotel proposals in the City such as the unfinished luxury hotel by Glenroy Coachella, LLC and proposed hotel by the Twenty-Nine Palms Band of Mission Indians. (b) An overview of recent hotel market performance for the Coachella Valley submarket, including supply and demand factors, ADR, occupancy trends, and seasonal patterns. This overview will include:
o A review of third-party data sources available from firms specializing in hospitality, such as Smith Travel Research (STR), HVS Global Hospitality Services (HVS), and Coldwell Banker Richard Ellis (CBRE);
o Evaluation of short-term rental (Airbnb, Vrbo, etc.) trends in the Coachella Valley and the Trade Area;
o Identification of existing hotels that operate under a “vacation rental” format through one of the short-term rental platforms;
o Preparation of selected case studies in the Coachella Valley, including hotel properties that combine residential, condotel, and/or timeshare uses; and o Profile of product type, features, and amenities for competitive hotel inventory in the Trade Area and City.

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(c) Field surveys of the City and Trade Area, with a focus on potential development sites, competitive inventory, and existing amenities and services available to hotel guests. (d) Identification of availability or deficiency of major infrastructure and amenities, including access/transportation (I-10/SR 111/SR 86; Jacqueline Cochran Regional Airport), restaurants, entertainment, recreation, etc.
(e) Market survey and supplementary stakeholder interviews to understand the demand for meeting and event space within the Trade Area, including:
o Case studies for comparable facilities that may be relevant to development potential within Coachella Valley; and
o A qualitative evaluation of the potential demand for indoor/outdoor meeting/banquet space within the Trade Area and City.
(f) Preparation of a hotel room demand forecast that will analyze existing and potential hotel market demand by market segment, including tourism/leisure, commercial/corporate, group/convention, and/or government.
(g) Recommendation of appropriate type, number of rooms, room size, features, amenities, and market segment for potential hotel(s) for the specific sites identified in Phase 1. (h) Identification of potential branding themes and specific market niches that may be applicable to potential hotel(s). This will include identification of specific hotel flags/brands (e.g., Hyatt Place, Hilton/Hampton Inn, Marriott, etc.) most appropriate for the specific sites identified in Phase 1. (3) Phase 3: Financial Feasibility – KMA will undertake financial feasibility analyses of up to three (3) prototypical hotel development prototypes to be considered in the City. Subject to the findings of the market assessment, one or more of these prototypes may include a mix of uses or ownership formats such as residential, condotel, or timeshare. The financial feasibility analyses will include:
(a) An estimate of development costs (land acquisition, directs, indirects, and financing); stabilized income and expenses; target return; and identification of any financing gap. These estimates will incorporate site-specific infrastructure costs to be provided by City staff. They will also reflect development costs with and without prevailing wages. In addition, the KMA pro forma analyses will include a 15-year cash flow projection for the hotel operation, showing the estimated economic return to the developer and the potential Transient Occupancy Tax (TOT) generated to the City.

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(b) In the event of a financing gap, KMA will test up to three (3) TOT sharing formulas for each prototype hotel. This task will demonstrate the enhanced feasibility of each prototype hotel, while assuring a guaranteed minimum flow of TOT revenues to the City. (4) Phase 4: Financing Approaches – to supplement the financial feasibility analysis, KMA will evaluate various levels of financing approaches that will incentivize hotel development within the City, including, but not limited to: TOT sharing, tax-exempt bonds, grants and subsidies, and tourism and entertainment districts. This evaluation will consider comparable hotel financing structures such as the tax-exempt and taxable revenue bonds utilized to construct Hotel Polaris in Colorado Springs, Colorado.
(5) Phase 5: Findings and Recommendations – KMA will summarize the key findings from the Phase 2 market assessment, Phase 3 financial feasibility analysis, and Phase 4 financing approaches. The summary will include:
(a) Key findings of the market assessment in terms of the market demand forecast and recommended hotel product type for specific sites and the Trade Area. (b) Outcomes of the financing gap analysis and corresponding TOT sharing scenarios. (c) Recommended key steps, including prerequisites for financing and development, for the City and other parties to implement and attract the specific hotel type(s). (6) Phase 6: Report and Presentation – KMA will prepare a report to include an executive summary, narrative discussion, and supporting tables and exhibits. This phase will include:
(a) One (1) Administrative Draft, one (1) Draft, and one (1) Final Draft of the report, submitted in PDF format only.
(b) Preparation of a presentation summarizing the methodology, analyses, findings, and recommendations from both the market assessment and financial feasibility evaluation. (c) Attendance and presentation at one (1) City Council meeting.

IV. DATA REQUIREMENTS
KMA requires the following data items from the City and Visit Greater Palm Springs:

City
• Recommendations of key stakeholders to interview (event organizers, brokers, property owners, etc.)

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• List of commercial and residential projects in the pipeline • Project information for the unfinished luxury hotel by Glenroy Coachella, LLC and the proposed hotel by the Twenty-Nine Palms Band of Mission Indians
• 10-year history of TOT data for existing visitor accommodations/short-term rentals (Airbnb, Vrbo, etc.)
• Map of potential candidate sites/locations for hotel development considered by the City Visit Greater Palm Springs
• Recommendations of key stakeholders to interview (hotel operators, event managers, etc.) • Updated Economic Impact Reports (Tourism 2023)
• Updated Short-Term Vacation Rental Economic Impact Reports (2023) • If available, 10-year history of number of overnight vs. day visitors V. BUDGET
KMA proposes to complete the above scope of services on a time-and-materials basis in accordance with the attached hourly billing rate schedule. Our total budget requirement is $79,500, including reimbursables, as broken out below.

Phase Budget
Phase 1 – Initiation/Stakeholder Surveys $6,500
Phase 2 – Market Assessment $25,500
Phase 3 – Financial Feasibility $27,500
Phase 4 – Financing Approaches $4,500
Phase 5 – Recommendations $5,000
Phase 6 – Report and Presentation $7,500
Subtotal (Phases 1-6) $76,500
Add: Reimbursables $3,000
Grand Total $79,500
This budget includes the following limitations:
• Up to two (2) in-person meetings with City and Visit Greater Palm Springs staff • Up to four (4) virtual meetings with City and Visit Greater Palm Springs staff • Maximum of one (1) City Council meeting
VI. SCHEDULE
KMA anticipates completion of our Administrative Draft report within 120 calendar days from contract authorization and receipt of relevant background data.

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VII. LIMITING CONDITIONS
In accepting this proposal/contract, the City represents, acknowledges, and agrees that:

1. KMA is not advising or recommending any action be taken by the City with respect to any prospective, new, or existing municipal financial products or issuance of municipal securities (including with respect to the structure, timing, terms, and other similar matters concerning such financial products or issues).

2. KMA is not acting as a Municipal Advisor to the City and does not assume any fiduciary duty hereunder, including, without limitation, a fiduciary duty to the City pursuant to Section 15B of the Exchange Act with respect to the services provided hereunder and any information and material contained in KMA’s work product.

3. The City shall discuss any such information and material contained in KMA’s work product with any and all internal and/or external advisors and experts, including its own Municipal Advisors, that it deems appropriate before acting on the information and material.

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VIII. FIRM PROFILE
KMA is a real estate advisory firm founded in 1973 with specialized focus on public/private partnerships.

From offices in San Diego, Los Angeles, and Berkeley, KMA has served over 700 clients on more than 2,500 projects. Representative public sector clients include nearly every major municipality in California, as well as housing authorities, transit districts, counties, special districts, port authorities, and colleges and universities.

Now in our 50th year, KMA offers a wide array of integrated services to our public agency clients, working collaboratively with them to help them make informed, strategic, market-based decisions. Our objective is to provide decision makers with sound advice supported by strong technical analysis of all economic factors that impact success, including market conditions, financial investment requirements, community needs and benefits, and development issues. The longevity of our client relationships throughout the State attests to the quality and responsiveness of KMA’s work.

KMA’s major service areas include:
 Land Use Economics
 Affordable Housing Transactions and Policy
Evaluation
 Disposition Strategies and Developer
Negotiations
 Public/Private Partnerships (P3s)
 Infrastructure Financing Districts
 Fiscal and Economic Impact Analysis
A unique strength of KMA is the depth, continuity, and availability of our principals, who all have decades of experience analyzing and solving complex real estate economic issues. Their personal involvement in every assignment is a key factor in the firm’s ongoing success. For more information about KMA, please visit our website at www.keysermarston.com.

IX. QUALIFICATIONS
Client: City of Indio
Project: Midscale Hotel Demand Assessment
KMA worked with the City of Indio to evaluate the market and financial feasibility of a midscale hotel within the City. This evaluation included a review of demographic and economic trends, evaluation of regional and local hotel markets, and interviews with key stakeholders. KMA projected the
supportable demand for midscale, upper midscale, and
upscale hotels over a 10-year period and prepared a financial feasibility analysis for a midscale hotel.

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Client: City of Indio
Project: Transient Occupancy Tax (TOT) Sharing
KMA assisted the City of Indio with analyses supporting potential TOT sharing agreements for the development of several hotels in the City, including the Fairfield Inn & Suites (built in 2018) and Hampton Inn & Suites (built in 2020). These analyses involved reviewing developer financial pro forma models, preparing an independent financial analysis, and determining the magnitude of feasibility gap. KMA also tested alternative TOT sharing scenarios between the City and
developer in order to enhance project feasibility.

Client: City of Oceanside
Project: Mission Pacific Hotel and Seabird Resort
KMA assisted the City of Oceanside with the financial
feasibility analysis and negotiation of business terms for the Mission Pacific Hotel and The Seabird Resort. The two adjacent hotels opened in May 2021, featuring 387 hotel keys,
restaurants, retail, public gardens, luxury spa, and 22,000 SF of event space. Located at the base of the historic Oceanside Pier, the hotels comprise the largest newly constructed beachfront development on the San Diego coastline in over 20 years.

Client: San Diego Unified Port District
Project: Gaylord Pacific Resort and Convention Center, Chula Vista Bayfront KMA worked with the San Diego Unified Port District,
City of Chula Vista, and RIDA Development to evaluate,
negotiate, and document the planned development of
the Gaylord Pacific Resort and Convention Center on
the Chula Vista Bayfront. The $1.2 billion development
– which will encompass a 1,600-room hotel, a
275,000-SF convention center, and new public parks –
broke ground in July 2022. Over the course of the predevelopment feasibility evaluation and developer negotiations, KMA prepared and presented numerous analyses and studies to agency senior staff, Port Commissioners, City Councilmembers, and other stakeholders in both individual briefings, Closed Sessions, and/or public meetings.

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Client: City of Imperial Beach
Project: Breakwater Hotel
KMA prepared an Economic Development Subsidy
Report, financial feasibility analysis, and reviewed an amendment to the Purchase and Sale Agreement for a
proposed 101-room hotel located west of the
Breakwater Town Center in the City of Imperial
Beach. As part of the Economic Development Subsidy
Report and financial feasibility analysis, KMA
estimated the proposed subsidy to the Developer,
projected tax revenues to the City, and evaluated the
Developer’s rate of return relative to hotel industry standards. Additionally, KMA prepared an assessment of potential financial impact of a proposed land use change from a retail use to a hotel use as part of an amendment to the Purchase and Sale Agreement.

Item 23.
80237.00000\34369633.1
BB&K (2021) -1- PROFESSIONAL SERVICES AGREEMENT
CITY OF COACHELLA AND KEYSER MARSTON ASSOCIATES, INC.

PROFESSIONAL SERVICES AGREEMENT

FOR HOTEL FEASIBILITY STUDY

1. PARTIES AND DATE.

This Agreement is made and entered into this 11th day of December, 2024, by and between the City of Coachella (“City”), a municipal corporation organized under the laws of the State of California with its principal place of business at 1515 6th Street, Coachella, California 92236, County of Riverside, State of California and Keysar Marston Associates, Inc. (“Consultant”), with its principal place of business at 555 West Beech St., Suite 460, San Diego, CA 92101. City and Consultant are sometimes individually referred to herein as "Party" and collectively as "Parties."

2. RECITALS.

2.1 Consultant.

Consultant desires to perform and assume responsibility for the provision of certain professional services required by the City on the terms and conditions set forth in this Agreement.

Consultant represents that it is experienced in providing economic development consulting services for a hotel feasibility study services to public clients, is licensed in the State of California, and is familiar with the economic development plans of City.

2.2 Project.

City desires to engage Consultant to render such professional services for the development of a Hotel Feasibility Study that will include, the following major tasks, such as the initiation of stakeholder surveys; hotel market assessment; financial feasibility; financing approaches; findings and recommendations and final report and City Council presentation ("Project") as set forth in this Agreement.

3. TERMS.

3.1 Scope of Services and Term.

3.1.1 General Scope of Services. Consultant promises and agrees to furnish to the City all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the professional consulting services necessary for the Project described in Exhibit "A" attached hereto and incorporated herein by reference (“Services”).

The Services shall be more particularly described in the individual Task Order issued by the City or its designee. No Services shall be performed unless authorized by a fully executed Task Order in the form attached hereto as Exhibit “B”. All Services shall be subject to, and performed in accordance with, this Agreement, each Task Order, the exhibits attached hereto and incorporated herein by reference, and all applicable local, state and federal laws, rules and regulations.

3.1.2 Term. The term of this Agreement shall be from December 11, 2024 to May 11, 2025, unless earlier terminated as provided herein. The Parties may, by mutual, written consent, extend the term of this Agreement if necessary to complete the Services.

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BB&K (2021) -2- PROFESSIONAL SERVICES AGREEMENT

3.2 Compensation.

3.2.1 Compensation. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement in the amount of Seventy Nine Thousand Five Hundred Dollars ($79,500). The maximum compensation for Services to be provided pursuant to each Task Order shall be set forth in the relevant Task Order.

Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement.

3.2.2 Payment of Compensation. Consultant shall submit to City a monthly invoice, which indicates work completed and hours of Services rendered by Consultant. The invoice shall describe the amount of Services provided since the initial commencement date, or since the start of the subsequent billing periods, as appropriate, through the date of the invoice.

City shall, within 30 days of receiving such invoice, review the invoice and pay all non-disputed and approved charges. If the City disputes any of Consultant's fees, the City shall give written notice to Consultant within thirty (30) days of receipt of an invoice of any disputed fees set forth therein. Payment shall not constitute acceptance of any Services completed by Consultant. The making of final payment shall not constitute a waiver of any claims by the City for any reason whatsoever.

3.2.3 Reimbursement for Expenses. Consultant shall not be reimbursed for any expenses unless authorized in writing by City

3.2.4 Extra Work. At any time during the term of this Agreement, City may request that Consultant perform Extra Work. As used herein, "Extra Work" means any work which is determined by City to be necessary for the proper completion of the Project, but which the Parties did not reasonably anticipate would be necessary at the execution of this Agreement.

Consultant shall not perform, nor be compensated for, Extra Work without written authorization from the City.

3.3 Responsibilities of Consultant.

3.3.1 Independent Contractor; Control and Payment of Subordinates. The Services shall be performed by Consultant or under its supervision. Consultant will determine the means, methods and details of performing the Services subject to the requirements of this Agreement. City retains Consultant on an independent contractor basis and not as an employee.

Any personnel performing the Services on behalf of Consultant shall not be employees of City and shall at all times be under Consultant's exclusive direction and control. Neither City, nor any of its officials, officers, directors, employees or agents shall have control over the conduct of Consultant or any of Consultants officers, employees or agents, except as set forth in this Agreement. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law.

Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance.

3.3.2 Schedule of Services. Consultant shall perform the Services in a prompt and timely manner. Consultant shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines set forth in each individual Task Order issued by the City. Consultant represents that it has the professional and technical

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personnel required to perform the Services expeditiously. Upon request of City, Consultant shall provide a more detailed schedule of anticipated performance to meet the established schedules and deadlines.

3.3.3 Conformance to Applicable Requirements. All work prepared by Consultant shall be subject to the approval of City.

3.3.4 Substitution of Key Personnel. Consultant has represented to City that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon written approval of City. In the event that City and Consultant cannot agree as to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause. The key personnel for performance of this Agreement are as follows:
 Michael D. Tactay, Manager

3.3.5 City's Representative. The City hereby designates Celina Jimenez, Economic Development Director, or his/her designee, to act as its representative in all matters pertaining to the administration and performance of this Agreement ("City's Representative").

City's Representative shall have the power to act on behalf of the City for review and approval of all products submitted by Consultant but not the authority to enlarge the Scope of Services or change the total compensation due to Consultant under this Agreement. The City Manager shall be authorized to act on City's behalf and to execute all necessary documents which enlarge the Scope of Services or change the Consultant's total compensation subject to the provisions contained in this Agreement. Consultant shall not accept direction or orders from any person other than the City Manager, City's Representative or his/her designee.

3.3.6 Consultant's Representative. Consultant hereby designates Michael D.

Tactay, Manager, or his/her designee, to act as its representative for the performance of this Agreement ("Consultant's Representative"). Consultant's Representative shall have full authority to represent and act on behalf of the Consultant for all purposes under this Agreement. The Consultant's Representative shall supervise and direct the Services, using his/her best skill and attention, and shall be responsible for all means, methods, techniques, sequences, and procedures and for the satisfactory coordination of all portions of the Services under this Agreement.

3.3.7 Coordination of Services. Consultant agrees to work closely with City staff in the performance of Services and shall be available to City's staff, consultants and other staff at all reasonable times.

3.3.8 Standard of Care; Performance of Employees. Consultant shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Services. Consultant warrants that all employees and subconsultants shall have sufficient skill and experience to perform the Services assigned to them. Consultant represents that it, its employees and subconsultants have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, and that such licenses and approvals shall be maintained throughout the term of this Agreement. Consultant shall perform, at its own cost and expense and without reimbursement from the City, any services

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necessary to correct errors or omissions which are caused by the Consultant's failure to comply with the standard of care provided for herein. Any employee of the Consultant or its subconsultants who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed from the Project by the Consultant and shall not be re-employed to perform any of the Services or to work on the Project.

3.3.9 Period of Performance.

3.3.9.1 Consultant shall perform and complete all Services under this Agreement within the term set forth in Section 3.1.2 above (“Performance Time”). Consultant shall also perform the Services in strict accordance with any completion schedule or Project milestones described in Exhibits “A” or “B” attached hereto, or which may be separately agreed upon in writing by the City and Consultant (“Performance Milestones”). Consultant agrees that if the Services are not completed within the aforementioned Performance Time and/or pursuant to any such Performance Milestones developed pursuant to provisions of this Agreement, it is understood, acknowledged and agreed that the City will suffer damage.

3.3.9.2 Neither City nor Consultant shall be considered in default of this Agreement for delays in performance caused by circumstances beyond the reasonable control of the non-performing Party. For purposes of this Agreement, such circumstances include a Force Majeure Event. A Force Majeure Event shall mean an event that materially affects a Party’s performance and is one or more of the following: (1) Acts of God or other natural disasters; (2) terrorism or other acts of a public enemy; (3) orders of governmental authorities (including, without limitation, unreasonable and unforeseeable delay in the issuance of permits or approvals by governmental authorities that are required for the services); (4) strikes and other organized labor action occurring at the site and the effects thereof on the services, only to the extent such strikes and other organized labor action are beyond the control of Consultant and its subcontractors, and to the extent the effects thereof cannot be avoided by use of replacement workers; and (5) pandemics, epidemics or quarantine restrictions. For purposes of this section, “orders of governmental authorities,” includes ordinances, emergency proclamations and orders, rules to protect the public health, welfare and safety, and other actions of a public agency applicable to the services and Agreement.

3.3.9.3 Should a Force Majeure Event occur, the non-performing Party shall, within a reasonable time of being prevented from performing, give written notice to the other Party describing the circumstances preventing continued performance and the efforts being made to resume performance of this Agreement. Force Majeure Events and/or delays, regardless of the Party responsible for the delay, shall not entitle Consultant to any additional compensation.

Notwithstanding the foregoing in this section, the City may still terminate this Agreement in accordance with the termination provisions of this Agreement.

3.3.10 Laws and Regulations; Employee/Labor Certification.

3.3.10.1 Compliance with Laws. Consultant shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Project or the Services, including all Cal/OSHA requirements, and shall give all notices required by law. Consultant shall be liable for all violations

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of such laws and regulations in connection with the Services and this Agreement. All violations of such laws and regulations shall be grounds for the City to terminate the Agreement for cause.

3.3.10.2 Employment Eligibility; Consultant. Consultant certifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986, as may be amended from time to time and shall require all subconsultants and sub-subconsultants to comply with the same. Consultant certifies that it has not committed a violation of any such law within the five (5) years immediately preceding the date of execution of this Agreement, and shall not violate any such law at any time during the term of the Agreement.

3.3.10.3 Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subconsultant, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Consultant shall also comply with all relevant provisions of City's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted.

3.3.10.4 Air Quality. To the extent applicable, Consultant must fully comply with all applicable laws, rules and regulations in furnishing or using equipment and/or providing services, including, but not limited to, emissions limits and permitting requirements imposed by the South Coast Air Quality Management District (SCAQMD) and/or California Air Resources Board (CARB). Consultant shall indemnify City against any fines or penalties imposed by SCAQMD, CARB, or any other governmental or regulatory agency for violations of applicable laws, rules and/or regulations by Consultant, its subconsultants, or others for whom Consultant is responsible under its indemnity obligations provided for in this Agreement.

3.3.10.5 Water Quality Management and Compliance. Consultant shall keep itself and all subcontractors, staff, and employees fully informed of and in compliance with all local, state and federal laws, rules and regulations that may impact, or be implicated by the performance of the Services including, without limitation, all applicable provisions of the City’s ordinances regulating water quality and storm water; the Federal Water Pollution Control Act (33 U.S.C. § 1251, et seq.); the California Porter-Cologne Water Quality Control Act (Water Code § 13000 et seq.); and any and all regulations, policies, or permits issued pursuant to any such authority. Consultant must additionally comply with the lawful requirements of the City, and any other municipality, drainage district, or other local agency with jurisdiction over the location where the Services are to be conducted, regulating water quality and storm water discharges. City may seek damages from Consultant for delay in completing the Services caused by Consultant’s failure to comply with the laws, regulations and policies described in this Section, or any other relevant water quality law, regulation, or policy.

3.3.10.6 Safety. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Consultant shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed.

3.3.11 Insurance.

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3.3.11.1 Time for Compliance. Consultant shall not commence work under this Agreement until it has provided evidence satisfactory to the City that it has secured all insurance required under this section. In addition, Consultant shall not allow any subconsultant to commence work on any subcontract until it has provided evidence satisfactory to the City that the subconsultant has secured all insurance required under this section. Failure to provide and maintain all required insurance shall be grounds for the City to terminate this Agreement for cause.

3.3.11.2 Types of Insurance Required. As a condition precedent to the effectiveness of this Agreement for work to be performed hereunder, and without limiting the indemnity provisions of the Agreement, the Consultant, in partial performance of its obligations under such Agreement, shall procure and maintain in full force and effect during the term of the Agreement the following policies of insurance. If the existing policies do not meet the insurance requirements set forth herein, Consultant agrees to amend, supplement or endorse the policies to do so.
(A) Commercial General Liability: Commercial General Liability Insurance which affords coverage at least as broad as Insurance Services Office "occurrence" form CG 00 01, or the exact equivalent, with limits of not less than $1,000,000 per occurrence and no less than $2,000,000 in the general aggregate. Defense costs shall be paid in addition to the limits. The policy shall contain no endorsements or provisions (1) limiting coverage for contractual liability; (2) excluding coverage for claims or suits by one insured against another (cross-liability); (3) products/completed operations liability; or (4) containing any other exclusion(s) contrary to the terms or purposes of this Agreement. (B) Automobile Liability Insurance: Automobile Liability Insurance with coverage at least as broad as Insurance Services Office Form CA 00 01 covering "Any Auto" (Symbol 1), or the exact equivalent, covering bodily injury and property damage for all activities with limits of not less than $1,000,000 combined limit for each occurrence. (C) Workers' Compensation: Workers' Compensation
Insurance, as required by the State of California and Employer's Liability Insurance with a limit of not less than $1,000,000 per accident for bodily injury and disease.

3.3.11.3 Insurance Endorsements. Required insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms approved by the City to add the following provisions to the insurance policies:
(A) Commercial General Liability: (1) Additional Insured: The City, its officials, officers, employees, agents, and volunteers shall be additional insureds with regard to liability and defense of suits or claims arising out of the performance of the Agreement.

Additional Insured Endorsements shall not (1) be restricted to "ongoing operations"; (2) exclude "contractual liability"; (3) restrict coverage to "sole" liability of Consultant; or (4) contain any other exclusions contrary to the terms or purposes of this Agreement. For all policies of Commercial General Liability insurance, Consultant shall provide endorsements in the form of ISO CG 20 10 10 01 and 20 37 10 01 (or endorsements providing the exact same coverage) to effectuate this requirement. (2) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium.

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(B) Automobile Liability. (1) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium.
(C) Workers' Compensation: (1) Cancellation: Required
insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium. (2) Waiver of Subrogation: A waiver of subrogation stating that the insurer waives all rights of subrogation against the City, its officials, officers, employees, agents, and volunteers.

3.3.11.4 Primary and Non-Contributing Insurance. All policies of Commercial General Liability and Automobile Liability insurance shall be primary and any other insurance, deductible, or self-insurance maintained by the City, its officials, officers, employees, agents, or volunteers shall not contribute with this primary insurance. Policies shall contain or be endorsed to contain such provisions.

3.3.11.5 Waiver of Subrogation. All required insurance coverages, except for the professional liability coverage, shall contain or be endorsed to waiver of subrogation in favor of the City, its officials, officers, employees, agents, and volunteers or shall specifically allow Consultant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subconsultants.

3.3.11.6 Deductibles and Self-Insured Retentions. Any deductible or selfinsured retention must be approved in writing by the City and shall protect the City, its officials, officers, employees, agents, and volunteers in the same manner and to the same extent as they would have been protected had the policy or policies not contained a deductible or self-insured retention.

3.3.11.7 Evidence of Insurance. The Consultant, concurrently with the execution of the Agreement, and as a condition precedent to the effectiveness thereof, shall deliver either certified copies of the required policies, or original certificates on forms approved by the City, together with all endorsements affecting each policy. Required insurance policies shall not be in compliance if they include any limiting provision or endorsement that has not been submitted to the City for approval. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf. At least fifteen (15 days) prior to the expiration of any such policy, evidence of insurance showing that such insurance coverage has been renewed or extended shall be filed with the City. If such coverage is cancelled or reduced and not replaced immediately so as to avoid a lapse in the required coverage, Consultant shall, within ten (10) days after receipt of written notice of such cancellation or reduction of coverage, file with the City evidence of insurance showing that the required insurance has been reinstated or has been provided through another insurance company or companies.

3.3.11.8 Acceptability of Insurers. Each such policy shall be from a company or companies with a current A.M. Best's rating of no less than A:VII and authorized to transact business of insurance in the State of California, or otherwise allowed to place insurance

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through surplus line brokers under applicable provisions of the California Insurance Code or any federal law.

3.3.11.9 Enforcement of Agreement Provisions (non estoppel).

Consultant acknowledges and agrees that actual or alleged failure on the part of the City to inform Consultant of non-compliance with any requirement imposes no additional obligation on the City nor does it waive any rights hereunder.

3.3.11.10 Requirements Not Limiting. Requirement of specific coverage or minimum limits contained in this Section are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance.

3.3.11.11 Additional Insurance Provisions
(A) The foregoing requirements as to the types and limits of insurance coverage to be maintained by Consultant, and any approval of said insurance by the City, is not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Consultant pursuant to this Agreement, including but not limited to, the provisions concerning indemnification.
(B) If at any time during the life of the Agreement, any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, City has the right but not the duty to obtain the insurance it deems necessary and any premium paid by City will be promptly reimbursed by Consultant or City will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, City may cancel this Agreement.
(C) The City may require the Consultant to provide complete copies of all insurance policies in effect for the duration of the Project. (D) Neither the City nor any of its officials, officers, employees, agents or volunteers shall be personally responsible for any liability arising under or by virtue of this Agreement.
(E) The limits set forth herein shall apply separately to each insured against whom claims are made or suits are brought, except with respect to the limits of liability. Further the limits set forth herein shall not be construed to relieve the Consultant from liability in excess of such coverage, nor shall it limit the Consultant’s indemnification obligations to the City and shall not preclude the City from taking such other actions available to the City under other provisions of the Agreement or law.
(F) Consultant shall report to the City, in addition to Consultant’s insurer, any and all insurance claims submitted by Consultant in connection with the Services under this Agreement.

3.3.11.12 Insurance for Subconsultants. Consultant shall include all subconsultants engaged in any work for Consultant relating to this Agreement as additional insureds under the Consultant's policies, or the Consultant shall be responsible for causing subconsultants to purchase the appropriate insurance in compliance with the terms of these Insurance Requirements, including adding the City, its officials, officers, employees, agents, and

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volunteers as additional insureds to the subconsultant's policies. All policies of Commercial General Liability insurance provided by Consultant’s subconsultants performing work relating to this Agreement shall be endorsed to name the City, its officials, officers, employees, agents and volunteers as additional insureds using endorsement form ISO CG 20 38 04 13 or an endorsement providing equivalent coverage. Consultant shall not allow any subconsultant to commence work on any subcontract relating to this Agreement until it has received satisfactory evidence of subconsultant’s compliance with all insurance requirements under this Agreement, to the extent applicable. The Consultant shall provide satisfactory evidence of compliance with this section upon request of the City.

3.4 Labor Code Requirements.

3.4.1 Prevailing Wages. Consultant is aware of the requirements of California Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on "public works" and "maintenance" projects. If the Services are being performed as part of an applicable "public works" or "maintenance" project, as defined by the Prevailing Wage Laws, and if the total compensation is $1,000 or more, Consultant agrees to fully comply with such Prevailing Wage Laws. City shall provide Consultant with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement. Consultant shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the Services available to interested parties upon request, and shall post copies at the Consultant's principal place of business and at the project site. It is the intent of the parties to effectuate the requirements of sections 1771, 1774, 1775, 1776, 1777.5, 1813, and 1815 of the Labor Code within this Agreement, and Consultant shall therefore comply with such Labor Code sections to the fullest extent required by law. Consultant shall defend, indemnify and hold the City, its officials, officers, employees, agents, and volunteers free and harmless from any claim or liability arising out of any failure or alleged failure to comply with the Prevailing Wage Laws.

3.4.2 Registration/DIR Compliance. If the Services are being performed on a public works project of over $25,000 when the project is for construction, alteration, demolition, installation, or repair work, or a public works project of over $15,000 when the project is for maintenance work, in addition to the foregoing, then pursuant to Labor Code sections 1725.5 and 1771.1, the Consultant and all subconsultants must be registered with the Department of Industrial Relations (“DIR”). Consultant shall maintain registration for the duration of the Project and require the same of any subconsultants.

3.4.3 Compliance Monitoring. This Project may also be subject to compliance monitoring and enforcement by the DIR. It shall be Consultant’s sole responsibility to comply with all applicable registration and labor compliance requirements, including the submission of payroll records directly to the DIR. Any stop orders issued by the DIR against Consultant or any subconsultant that affect Consultant’s performance of services, including any delay, shall be Consultant’s sole responsibility. Any delay arising out of or resulting from such stop orders shall be considered Consultant caused delay and shall not be compensable by the City. Consultant shall defend, indemnify and hold the City, its officials, officers, employees and agents free and harmless from any claim or liability arising out of stop orders issued by the DIR against Consultant or any subconsultant.

3.4.4 Labor Certification. By its signature hereunder, Consultant certifies that it

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is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services.

3.5 Termination of Agreement.

3.5.1.1 Grounds for Termination. City may, by written notice to Consultant, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Consultant of such termination, and specifying the effective date thereof, at least seven (7) days before the effective date of such termination. Upon termination, Consultant shall be compensated only for those Services which have been adequately rendered to City, and Consultant shall be entitled to no further compensation. Consultant may not terminate this Agreement except for cause. The rights and remedies of the City provided in this section shall not be exclusive and are in addition to any other rights and remedies provided by law, equity or under this Agreement.

3.5.1.2 Effect of Termination. If this Agreement is terminated as provided herein, City may require Consultant to provide all finished or unfinished Documents and Data and other information of any kind prepared by Consultant in connection with the performance of Services under this Agreement. Consultant shall be required to provide such document and other information within fifteen (15) days of the request.

3.5.1.3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated.

3.6 Indemnification.

3.6.1 To the fullest extent permitted by law, Consultant shall defend (with counsel of City’s choosing), indemnify and hold the City, its officials, officers, employees, volunteers, and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any acts, errors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant’s Services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and attorney’s fees and other related costs and expenses except such loss or damage caused by the sole negligence or willful misconduct of the City. Consultant's obligation to indemnify shall survive expiration or termination of this Agreement and shall not be restricted to insurance proceeds, if any, received by Consultant, the City, its officials, officers, employees, agents, or volunteers.

3.6.2 If Consultant’s obligation to defend, indemnify, and/or hold harmless arises out of Consultant’s performance as a “design professional” (as that term is defined under Civil Code section 2782.8), then, and only to the extent required by Civil Code section 2782.8, which is fully incorporated herein, Consultant’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, and, upon Consultant obtaining a final adjudication by a court of competent jurisdiction, Consultant’s liability for such claim, including the cost to defend, shall not exceed the

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Consultant’s proportionate percentage of fault.

3.7 General Provisions.

3.7.1 Accounting Records. Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement.

3.7.2 Independent Contractors and Subcontracting.

3.7.2.1 Use of Consultants. Consultant is aware of statutory and case law regarding classification of workers as independent contractors, including California Labor Code Section 2750.3 and Dynamex Operations West, Inc. v. Superior Court, 4 Cal. 5th 903 (2018). To ensure that Consultant is in compliance with the California Labor Code, Consultant shall only utilize its employees to provide the Services. Consultant may not provide the services through any independent contractor, subcontractor or subconsultant (“Subcontractor(s)”) unless approved by the City as set forth in Section 3.7.2.2 below. Consultant represents and warrants that all personnel who perform the Services on Consultant’s behalf are Consultant’s employees, and that Consultant complies with all applicable laws, rules and regulations governing its employees, including, but not limited to, the California Labor Code, Unemployment Insurance Code and all applicable Industrial Welfare Commission Wage Orders.

3.7.2.2 Prior Approval Required. Consultant shall not use any Subcontractor to provide the Services, or any portion of the work required by this Agreement, without prior written approval of City. In the event that City authorizes Consultant to use a Subcontractor, Consultant shall enter into a written agreement with the Subcontractor, which must include all provisions of the Agreement, including a restriction on the Subcontractor’s use of further independent contractors, subcontractors or subconsultants without the City’s prior written consent.

3.7.3 Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose:

Consultant: KEYSER MARSTON ASSOCIATES
555 West Beech St., Suite 460
San Diego, CA
ATTN: Michael D. Tactay, Manager
City: CITY OF COACHELLA
53462 Enterprise Way
Coachella, CA 92236
ATTN: Celina Jimenez, Economic Development Director
Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its

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applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service.

3.7.4 Ownership of Materials and Confidentiality.

3.7.4.1 Documents & Data; Licensing of Intellectual Property. This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement ("Documents & Data"). All Documents & Data shall be and remain the property of City, and shall not be used in whole or in substantial part by Consultant on other projects without the City’s express written permission. Within thirty (30) days following the completion, suspension, abandonment or termination of this Agreement, Consultant shall provide to City reproducible copies of all Documents & Data, in a form and amount required by City. City reserves the right to select the method of document reproduction and to establish where the reproduction will be accomplished. The reproduction expense shall be borne by City at the actual cost of duplication. In the event of a dispute regarding the amount of compensation to which the Consultant is entitled under the termination provisions of this Agreement, Consultant shall provide all Documents & Data to City upon payment of the undisputed amount. Consultant shall have no right to retain or fail to provide to City any such documents pending resolution of the dispute. In addition, Consultant shall retain copies of all Documents & Data on file for a minimum of fifteen (15) years following completion of the Project, and shall make copies available to City upon the payment of actual reasonable duplication costs. Before destroying the Documents & Data following this retention period, Consultant shall make a reasonable effort to notify City and provide City with the opportunity to obtain the documents.

3.7.4.2 Subconsultants. Consultant shall require all subconsultants to agree in writing that City is granted a non-exclusive and perpetual license for any Documents & Data the subconsultant prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Consultant or its subconsultants, or those provided to Consultant by the City.

3.7.4.3 Right to Use. City shall not be limited in any way in its use or reuse of the Documents and Data or any part of them at any time for purposes of this Project or another project, provided that any such use not within the purposes intended by this Agreement or on a project other than this Project without employing the services of Consultant shall be at City’s sole risk. If City uses or reuses the Documents & Data on any project other than this Project, it shall remove the Consultant’s seal from the Documents & Data and indemnify and hold harmless Consultant and its officers, directors, agents and employees from claims arising out of the negligent use or re-use of the Documents & Data on such other project. Consultant shall be responsible and liable for its Documents & Data, pursuant to the terms of this Agreement, only with respect to the condition of the Documents & Data at the time they are provided to the City upon completion, suspension, abandonment or termination. Consultant shall not be responsible or liable for any revisions to the Documents & Data made by any party other than Consultant, a party for whom the Consultant is legally responsible or liable, or anyone approved by the Consultant.

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3.7.4.4 Indemnification. Consultant shall defend, indemnify and hold the City, its directors, officials, officers, employees, volunteers and agents free and harmless, pursuant to the indemnification provisions of this Agreement, for any alleged infringement of any patent, copyright, trade secret, trade name, trademark, or any other proprietary right of any person or entity in consequence of the use on the Project by City of the Documents & Data, including any method, process, product, or concept specified or depicted.

3.7.4.5 Confidentiality. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents & Data either created by or provided to Consultant in connection with the performance of this Agreement shall be held confidential by Consultant. Such materials shall not, without the prior written consent of City, be used by Consultant for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to Consultant, which is otherwise known to Consultant or is generally known, or has become known, to the related industry shall be deemed confidential. Consultant shall not use City's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City.

3.7.4.6 Confidential Information. The City shall refrain from releasing Consultant’s proprietary information ("Proprietary Information") unless the City's legal counsel determines that the release of the Proprietary Information is required by the California Public Records Act or other applicable state or federal law, or order of a court of competent jurisdiction, in which case the City shall notify Consultant of its intention to release Proprietary Information.

Consultant shall have five (5) working days after receipt of the release notice to give City written notice of Consultant's objection to the City's release of Proprietary Information. Consultant shall indemnify, defend and hold harmless the City, and its officers, directors, employees, and agents from and against all liability, loss, cost or expense (including attorney’s fees) arising out of a legal action brought to compel the release of Proprietary Information. City shall not release the Proprietary Information after receipt of an objection notice unless either: (1) Consultant fails to fully indemnify, defend (with City's choice of legal counsel), and hold City harmless from any legal action brought to compel such release; and/or (2) a final and non-appealable order by a court of competent jurisdiction requires that City release such information.

3.7.5 Cooperation; Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement.

3.7.6 Entire Agreement. This Agreement contains the entire agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements.

3.7.7 Attorneys’ Fees. If either party commences an action against the other party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorneys’ fees and all costs of such action.

3.7.8 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in Riverside County. In addition to any and all contract requirements

Item 23.
80237.00000\34369633.1
BB&K (2021) -14- PROFESSIONAL SERVICES AGREEMENT
pertaining to notices of and requests for compensation or payment for extra work, disputed work, claims and/or changed conditions, Consultant must comply with the claim procedures set forth in Government Code sections 900 et seq. prior to filing any lawsuit against the City. Such Government Code claims and any subsequent lawsuit based upon the Government Code claims shall be limited to those matters that remain unresolved after all procedures pertaining to extra work, disputed work, claims, and/or changed conditions have been followed by Consultant. If no such Government Code claim is submitted, or if any prerequisite contractual requirements are not otherwise satisfied as specified herein, Consultant shall be barred from bringing and maintaining a valid lawsuit against the City.

3.7.9 Time of Essence. Time is of the essence for each and every provision of this Agreement.

3.7.10 City's Right to Employ Other Consultants. City reserves right to employ other consultants in connection with this Project.

3.7.11 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the parties.

3.7.12 Assignment or Transfer. Consultant shall not assign, sublet, or transfer this Agreement or any rights under or interest in this Agreement without the written consent of the City, which may be withheld for any reason. Any attempt to so assign or so transfer without such consent shall be void and without legal effect and shall constitute grounds for termination.

Consultant shall not subcontract any portion of the Services required by this Agreement, except as expressly stated herein, without prior written approval of City. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement.

3.7.13 Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to Consultant include all personnel, employees, agents, and subconsultants of Consultant, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.

3.7.14 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties.

3.7.15 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise.

3.7.16 No Third-Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties.

3.7.17 Invalidity; Severability. If any portion of this Agreement is declared invalid,

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80237.00000\34369633.1
BB&K (2021) -15- PROFESSIONAL SERVICES AGREEMENT
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

3.7.18 Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. Consultant further agrees to file, or shall cause its employees or subconsultants to file, a Statement of Economic Interest with the City’s Filing Officer as required under state law in the performance of the Services. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.

3.7.19 Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party.

3.7.20 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original.

3.7.21 Survival. All rights and obligations hereunder that by their nature are to continue after any expiration or termination of this Agreement, including, but not limited to, the indemnification obligations, shall survive any such expiration or termination.

3.7.22 Order of Precedence. The following order and succession of the referenced documents shall govern in the event of conflict between documents:

3.7.22.1 Amendment(s)

3.7.22.2 This Agreement

3.7.22.3 Task Orders
[SIGNATURES ON NEXT PAGE]

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80237.00000\34369633.1
BB&K (2021) -16- PROFESSIONAL SERVICES AGREEMENT

SIGNATURE PAGE TO PROFESSIONAL SERVICES AGREEMENT FOR HOTEL

FEASIBLITY STUDY SERVICES BETWEEN THE CITY OF COACHELLA AND KEYSAR MARSTON ASSOCIATES, INC.

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on the day and year first above written.

CITY OF COACHELLA KEYSAR MARSTON ASSOCIATES, INC.

By:

Its:

Printed Name:

By:

Its:

Printed Name:

Approved By:

City Manager
Approved as to Form:
_____________________________________
Best Best & Krieger LLP
City Attorney
Attested By:

City Clerk

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80237.00000\34369633.1
BB&K (2021) Exhibit “A” PROFESSIONAL SERVICES AGREEMENT EXHIBIT "A"

SCOPE OF SERVICES
KMA will provide the following Scope of Services (more details are provided in KMA Proposal):
 Phase 1: Initiation/Stakeholder Surveys – At the outset of the assignment, KMA will participate in a meeting with City staff and Visit Greater Palm Springs.  Phase 2: Hotel Market Assessment – KMA will conduct a market assessment of hotel development potential in eastern Riverside County (County); the eastern Coachella Valley trade area (Trade Area); neighboring cities such as Indio, La Quinta, and Palm Desert (Neighboring Cities); and the City and its Sphere of Influence (SOI).  Phase 3: Financial Feasibility – KMA will undertake financial feasibility analyses of up to three (3) prototypical hotel development prototypes to be considered in the City. Subject to the findings of the market assessment, one or more of these prototypes may include a mix of uses or ownership formats such as residential, condotel, or timeshare.  Phase 4: Financing Approaches – to supplement the financial feasibility analysis, KMA will evaluate various levels of financing approaches that will incentivize hotel development within the City, including, but not limited to: TOT sharing, tax-exempt bonds, grants and subsidies, and tourism and entertainment districts. This evaluation will consider comparable hotel financing structures such as the tax-exempt and taxable revenue bonds utilized to construct Hotel Polaris in Colorado Springs, Colorado.  Phase 5: Findings and Recommendations – KMA will summarize the key findings from the Phase 2 market assessment, Phase 3 financial feasibility analysis, and Phase 4 financing approaches.
 Phase 6: Report and Presentation – KMA will prepare a report to include an executive summary, narrative discussion, and supporting tables and exhibits.

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80237.00000\34369633.1
(BB&K 2017) Exhibit “B”
EXHIBIT "B"

SAMPLE TASK ORDER FORM
Task Order No. _______
Agreement: CITY OF COACHELLA HOTEL FEASIBILITY STUDY
Consultant: KEYSER MARSTON ASSOCIATES, INC.

The Consultant is hereby authorized to perform the following services subject to the provisions of the Agreement identified above:

List any attachments: (Please provide if any.)
Dollar Amount of Task Order: Not to exceed $79,500.00
Completion Date: MAY 2025
The undersigned Consultant hereby agrees that it will provide all equipment, furnish all materials, except as may be otherwise noted above, and perform all services for the work above specified in accordance with the Agreement identified above and will accept as full payment therefore the amount shown above.

CITY OF COACHELLA KEYSER MARSTON ASSOCIATES, INC.

Dated: Dated:

By: By:

Item 23.

STAFF REPORT
1/15/2025
TO: Honorable Mayor and City Council Members
FROM: Maritza Martinez, Interim City Manager
SUBJECT: Provide direction and approve appointments to the City’s Coachella Planning Commission, Parks and Recreation Commission and Culture and Arts Commission.

STAFF RECOMMENDATION:

Provide direction and approve appointments to fill vacancies the City’s Coachella Planning Commission, Parks and Recreation Commission and Culture and Arts Commission.

BACKGROUND:

The term has expired for various seated commissioners (highlighted below). The city advertised and accepted applications for these vacancies from December – January 7, 2025. The expired/vacant positions are highlighted below from the Planning Commission, Parks and Recreation Commission and Culture and Arts Commission.

COACHELLA PLANNING COMMISSION

APPOINTEE NOMINATED BY
(MEMBER OF COUNCIL)

ORIGINAL

APPOINTMENT

TERM EXPIRES
Diana Ramirez Councilmember Delgado March 8, 2023 November 2024 Jason Hernandez Mayor Pro-Tem Galarza March 8, 2023 November 2024 Yurema Arvizu Councilmember Figueroa March 8, 2023 November 2026 Isela Murillo Councilmember Virgen March 8, 2023 November 2026 Ruben Gonzalez Councilmember Galarza June 26, 2019 November 2024 Oscar Fonsesca (Alternate) Mayor Hernandez March 8, 2023 November 2026

Item 24.

COACHELLA PARKS AND RECREATION COMMISSION

APPOINTEE NOMINATED BY
(MEMBER OF COUNCIL)

ORIGINAL

APPOINTMENT

TERM EXPIRES
Rosalio Avila (Chair) Councilmember Galarza April 26, 2023 November 2024 Robert Antonio Caballero Councilmember Delgado April 26, 2023 November 2024 Andrew Gallegos Mayor Hernandez April 26, 2023 November 2026 Marcos Granados Jr.(Vice C) Mayor Pro Tem Virgen April 26, 2023 November 2026 Karen Hernandez Councilmember Dr. Figueroa April 26, 2023 November 2026 J. Carlos Ayala Alternate (Mayor Hernandez) April 26, 2023 November 2026

CULTURE AND ARTS COMMISSION

APPOINTEE NOMINATED BY
(MEMBER OF COUNCIL)

ORIGINAL

APPOINTMENT

TERM EXPIRES
Armando Lerma Mayor Hernandez July 26, 2023 November 2024 Clara Nieblas Mayor Pro Tem Virgen July 26, 2023 November 2026 Irene N. Rodriguez Councilmember Delgado July 26, 2023 November 2024 Juan Ponce Ramos Councilmember Dr. Figueroa July 26, 2023 November 2026 Oralia “Yaya” Ortiz
Javier Figueroa (Alt.)
Councilmember Galarza
Mayor Hernandez
July 26, 2023
July 26, 2023
November 2024
November 2024
DISCUSSION/ANALYSIS:

Per the City’s Municipal Code Section 2.26.020 Commission Member Appointment process is as follows: “. . . each council member may nominate an individual to serve on each city commission and committee subject to appointment by the mayor, with approval by the city council, at open session of a regular or special city council meeting. “ Next steps and options include:
1) vote to elect from the applicants currently on file (attached hereto) 2) choose to establish a new application period to invite additional applicants to apply for the vacant Commissioner and Alternate Commissioner positions and/or 3) provide alternate direction.

Item 24.

Candidates Applications Received Per Commission
Planning Commission (3 vacancies)
- Ruben Gonzalez
- Jesus Nunez (Planning/Parks)
- Elizabeth Aguilar
- Diana Ramirez
- Stephanie Ambriz
- Robert Caballero
- Oscar Fonseca
- Jason P. Hernandez
- Eva Lara
- Rosalio Avila (Planning/Parks)
Parks and Recreation Commission (3 vacancies)
- Rosalio Avila
- Jesus Nunez
Culture and Arts Commission (4 vacancies)
- Armando Lerma
- Irene Rodriguez
- Javier Figueroa
- Oralia Ortiz
FISCAL IMPACT:

None.

Attachments: Applications received (16)

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Item 24.

1. Why do you think you should be appointed? What is there specifically in your background, training, education and interests that qualifies you as a candidate? I believe I should be appointed to the planning committee because of my deep-rooted passion for building a stronger and more inclusive community and my unique blend of professional experiences, education, and ongoing personal development. Having worked closely with underserved populations through John Muir Charter School (continuation high school; students age 18-25), I’ve seen firsthand how access to thoughtful planning and resources can transform lives. This experience has given me a strong sense of responsibility to contribute to shaping a city where every resident feels supported and heard.

One of my proudest achievements has been connecting underserved populations to important resources such as healthcare, immigration support, and job training through collaborative partnerships with local organizations. This has not only strengthened my understanding of community needs but also reinforced my belief in the power of equitable urban development. Academically, my bachelor’s degree from UC Riverside and current pursuit of a GIS certificate reflect my commitment to equipping myself with the tools needed to make data-driven decisions. I’m excited about the opportunity to bring these skills into practice, especially as GIS plays a critical role in identifying patterns and creating efficient, sustainable urban spaces.

Born and raised in Coachella, I have admired the progress of Coachella’s rich potential. Joining the planning committee would be a meaningful way for me to give back and ensure that Coachella continues to grow in a way that benefits all its residents. My ability to communicate effectively, navigate complex challenges,

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and bring people together makes me confident in my ability to contribute to this role.

2. What do you see as the goals and objectives of the Commission? How would you help achieve these objectives and goals?
I see the goals and objectives of the planning commission as fostering responsible urban development, ensuring equitable access to resources and services, and maintaining a balance between growth and sustainability. The commission plays a role in shaping the community by addressing housing, transportation, land use, and public spaces. Its work must reflect the needs of all residents while prioritizing inclusivity, environmental stewardship, and economic vitality.

To help achieve these objectives, I would draw on my experience in community engagement, education, and resource coordination. At John Muir Charter School, I’ve worked to connect underserved populations to essential resources by fostering partnerships with local organizations. This ability to understand and address diverse community needs would allow me to contribute meaningfully to inclusive planning decisions. Additionally, I am eager to bring my growing expertise in GIS to the commission. GIS tools enable data-driven analysis that can inform sustainable development, such as identifying areas that need improvement with accessibility in public resources. By integrating these insights into decision-making, we can create a city that grows responsibly while preserving its environmental assets.

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Collaboration is key to achieving these goals. My ability to engage with stakeholders from various backgrounds, communicate effectively, and prioritize shared objectives ensures that I can help the commission create an inclusive and sustainable community for all residents.

3. What special qualities can you bring to the Commission? I bring a unique combination of skills, experiences, and perspectives that would contribute to the commission’s work. One of my key strengths is my ability to foster collaboration across diverse groups, a quality I’ve honed through my work at John Muir Charter School, where I facilitated partnerships between the school and local community organizations. I’m adept at navigating different interests and building bridges to ensure all voices are heard, especially those of underserved populations.

Additionally, my background in international engagement with the World Federation of United Nations Associations (WFUNA) has provided me with a broader perspective on global development, diplomacy, and the importance of inclusive decision-making. While at WFUNA, I helped organize youth events and coordinated with a variety of international stakeholders, which sharpened my ability to work in diverse, multicultural environments. This experience has made me value considering different viewpoints and integrating a wide range of ideas to inform decision-making, especially in complex planning contexts. I am also committed to learning and self-improvement, currently pursuing a GIS certificate to strengthen my analytical and data-driven approach to planning. I see GIS as an important tool for informed, sustainable urban development, and I’m excited to integrate this knowledge into the commission’s work.

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These qualities, collaboration, a global mindset, and a passion for learning and sustainability, are what I would bring to the commission, ensuring that decisions are inclusive, data-informed, and focused on creating a thriving community for all.

4. Do you have any questions or comments about the Commission’s structure or functions?
One question I have is about the commission’s process for engaging the community, especially underrepresented groups, during the planning and decision-making stages. How does the commission ensure that all voices are heard and that diverse perspectives are incorporated into planning proposals? Also, I’d be interested to learn more about how the commission integrates new technologies and data tools, like GIS, into its decision-making processes. Given my interest in using GIS for urban planning, I’d love to understand how such tools are currently being utilized or if there are opportunities for incorporating them further.

Lastly, I’m curious about the commission’s approach to sustainability and how it is prioritized in long-term planning. Are there specific sustainability goals or initiatives the commission is focusing on that I could potentially contribute to with my background in environmental science and community outreach?

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5. Other comments and/or ideas as to how you as a member of the selected Commission could benefit the City of Coachella.

As a member of the Planning Commission, I believe I can bring a unique and valuable perspective to benefit the City of Coachella. My background in community engagement, education, and resource coordination will allow me to help ensure that planning decisions are inclusive and reflect the needs of all residents, particularly those from underserved communities. I am committed to creating spaces where everyone’s voice is heard, and I would work to build stronger connections between the commission and local organizations, ensuring that planning efforts align with the community’s needs.

Furthermore, my ongoing pursuit of a GIS certificate and my interest for sustainable urban development position me to contribute meaningfully to long-term planning initiatives. I am excited to use GIS tools to inform decisions, improve resource distribution, and ensure that growth happens in a way that respects the environment and promotes sustainability.

Additionally, my experience in international collaboration with the World Federation of United Nations Associations has broadened my understanding of how different regions tackle urban planning challenges. This global perspective will allow me to approach local issues with creative solutions and the ability to think beyond the immediate context, considering broader trends in development and sustainability.

Ultimately, I believe my combination of local community work, international experience, and commitment to continuous learning can help ensure that Coachella’s growth is thoughtful, inclusive, and sustainable for years to come.

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CITY OF COACHELLA

CULTURAL AND ARTS COMMISSION APPLICATION
Application deadline is 6:00 p.m. on -DQXDU\   Application must be received by the deadline in order to be considered NAME: _____________________________________________________________________________ ADDRESS: _________________________
TELEPHONE: ______________ E-MAIL: ____
To be eligible for appointment to the Commission you must be a resident of the City of Coachella.

Members may only serve on one commission/committee.

Note: In the event a member of the commission has three (3) consecutive unexcused absences from meetings of the Commission, the City Council may declare the office of such member vacant.

PLEASE FURNISH BRIEF RESPONSES TO THE QUESTIONS BELOW:

1. Why do you think you should be appointed? What is there specifically in your background, training, education and interests that qualifies you as a candidate? __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________

2. What do you see as the goals and objectives of the Commission? How would you help achieve these objectives and goals?
__________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________

3. What special qualities can you bring to the Commission? __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ Oralia "Yaya" Ortiz
Since 2009 I have worked dilengenlty to bring art programs & venues to the community of Coachellla.

Beginning with the Shadly Lane Mural, Synergy Music & Arts Festival, Women Rising, Arte De Barrio etc.

Currently, a art & music center that would benefit at-risk youth and the community at large.

Goals & Objectives of an Arts Commission should always have the community in mind, to be objective and fair to every artist that submit RFP's and ideas. Art installations should also reflect the community it's serving .

I believe art in an intergal part of every community. It brings vitality, socail engagement, inspires local culture of creative thinkers. I will continue that these values are instilled in every potential art project that is submitted.

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CITY OF COACHELLA
&8/785$/ $1' $576 COMMISSION APPLICATION
PAGE 2

4. Do you have any questions or comments about the Commission’s structure or functions? __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________

5. Other comments and/or ideas as to how you as a member of the Cultural and Arts Commission could benefit the City of Coachella.
__________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ ______________________________ ________________________________ Signature Date
Note: Members of commissions shall be appointed for four year terms or less. The term of each commission member shall continue for the term of the nominating council member and automatically terminate when the council member’s term ends. If a council member is reelected, that council member is entitled to make all new nominations or may choose to re-nominate the council member’s previous nominee.

PLEASE RETURN THIS COMPLETED APPLICATION TO:
'HOLD *UDQDGRV, Deputy City Clerk
City of Coachella
53-462 Enterprise Way
Coachella, CA 92236
[email protected] (Revised 02-10-2021)
2UDOLD 2UWL] 
I would like to see the arts commission to include funding for programs and venues.

I will stirve for fairness to assure every artist has an opportunity to submit art work that reflects our community.

That funds be distrubutied fairly so eveyone has an opportunity to showcase their art work.

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STAFF REPORT
1/22/2025
TO: Honorable Mayor and City Council Members
FROM: Delia Granados, Deputy City Clerk
SUBJECT: Mayor's Appointments to Various Council Subcommittees, Coachella Valley Association of Government (CVAG) Committees, Other Agencies, etc.

STAFF RECOMMENDATION:

Appoint the members of Council to the various intergovernmental organizations, associations and City subcommittees.

BACKGROUND:

The City Council Members represent the City on various intergovernmental agencies and associations that consider policy and legislation, which directly impacts the City. In addition, Council Members serve on City subcommittees (ad hoc and standing) and as liaisons to several entities. In compliance with the requirements of the Maddy Act, Government Code 54972, the attached local appointments list shows all boards, commissions, and committees which are appointed by the legislative body of the local agency and the dates of their terms of office.

Also, attached is a completed Fair Political Practices Commission (FPPC) form 806, which has been posted to the City’s website. This form is required pursuant to FPPC Regulation 18705.5.

Each agency must post on its website Form 806, which lists all the paid appointed positions to which an official will vote to appoint themselves. This form must be posted prior to a vote (or consent item) to appoint a governing board member if the appointee will participate in the decision and the appointment results in additional income of $250 or more in a 12-month period.

The Mayor will be identifying Council appointments to these Committees.

FISCAL IMPACT:

There is no fiscal impact to the General Fund.

Attachments: Appointments List
FPPC Form 806

Item 25.

C:\Users\MeetingsOfficeUser11\AppData\Local\Temp\tmpEF91.tmp

CITY OF COACHELLA

ELECTED/APPOINTED OFFICIALS, BOARDS, COMMITTEES AND COMMISSIONS

LOCAL APPOINTMENTS LIST
CALENDAR YEAR 2025 DRAFT

ELECTED OFFICIALS
City Council Meetings are held on the second and fourth Wednesday of each month in the Council Chamber of City Hall, beginning at 6:00 p.m.

ELECTED OFFICIALS TERM EXPIRES
Mayor Steven Hernandez November 2026
Mayor Pro Tem
Councilmember
Denise Delgado
Stephanie Virgen
November 2028
November 2026
Councilmember Dr. Frank Figueroa November 2026
Councilmember Yadira Perez November 2028
City Clerk Angela M. Zepeda November 2028
City Treasurer Mayra Perez November 2028

APPOINTED OFFICIALS
City Manager Gabriel D. Martin, PhD
City Attorney Carlos Campos
In compliance with the requirements of the Maddy Act, Government Code 54972, the following local appointments list shows all boards, commissions, and committees which are appointed by the legislative body of the local agency and the dates of their terms of office.

COACHELLA PLANNING COMMISSION – (Meets on the first and third Wednesday of each month at 6:00 p.m. at the Coachella Council Chambers of City Hall located at 1515 Sixth Street, Coachella.) The City Planning Commission shall consist of five regular members and one alternate member. Members of commissions shall be appointed for four-year terms or less. The term of each commission member shall continue for the term of the nominating council member and automatically terminate when the council member’s term ends. If a council member is reelected, that council member is entitled to make all new nominations or may choose to re-nominate the council member’s previous nominee.

APPOINTEE NOMINATED BY
(MEMBER OF COUNCIL)

ORIGINAL

APPOINTMENT

TERM EXPIRES
Diana Ramirez Councilmember Delgado March 8, 2023 November 2024 Jason Hernandez Mayor Pro-Tem Galarza March 8, 2023 November 2024 Yurema Arvizu Councilmember Figueroa March 8, 2023 November 2026 Isela Murillo Councilmember Virgen March 8, 2023 November 2026 Ruben Gonzalez Councilmember Galarza June 26, 2019 November 2024 Oscar Fonsesca (Alternate) Mayor Hernandez March 8, 2023 November 2026

Item 25.

City of Coachella Page 2
Committee Membership – 2024

OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE COACHELLA REDEVELOPMENT AGENCY (HEALTH AND SAFETY CODE SECTION 34179-34181): – (Meetings held as needed.) The Oversight Board was created pursuant to California State law that dissolved the Coachella Redevelopment Agency, along with all 400 redevelopment agencies in California, on February 1, 2012. That law, known as AB X1 26, required the City of Coachella, as the successor agency to the Coachella Redevelopment Agency, to create a new Oversight Board to oversee certain fiscal management of former Agency funds and assets.

Oversight Boards direct the staff of the Successor Agency, have fiduciary responsibilities to holders of enforceable obligations, approves actions of the Successor Agency and establishes the Recognized Payment Obligation Payment Schedule. It takes a majority of the Oversight Board to constitute a quorum and to vote to take action.

The California Redevelopment Dissolution Laws mandated the dissolution of the 25 existing Oversight Boards within the County of Riverside and the creation of a single Consolidated Oversight Board overseeing all 25 successor agencies within the County commencing on July 1, 2018.

QUALIFICATIONS APPOINTEE ORIGINAL

APPOINTMENT

TERM EXPIRES
Authority to represent the Successor Agency
before the Countywide Oversight Board, the
Riverside County Auditor-Controller, the State
Controller, the California Department of
Finance, or any other public body with regards to
the Successor Agency business with the
Countywide Oversight Board.

Gabriel Martin
City Manager
December 8, 2021 Open
COACHELLA PARKS AND RECREATION COMMISSION – (Meets on the third Tuesday of each month at 4:30 p.m. in the upstairs conference room at the Coachella Council Chambers of City Hall located at 1515 Sixth Street, Coachella.)
The Coachella Parks and Recreation Commission shall consist of five regular members and one alternate member.

Members of commissions shall be appointed for four-year terms or less. The term of each commission member shall continue for the term of the nominating council member and automatically terminate when the council member’s term ends. If a council member is reelected, that council member is entitled to make all new nominations or may choose to re-nominate the council member’s previous nominee.

APPOINTEE NOMINATED BY
(MEMBER OF COUNCIL)

ORIGINAL

APPOINTMENT

TERM EXPIRES
Rosalio Avila (Chair) Councilmember Galarza April 26, 2023 November 2024 Robert Antonio Caballero Councilmember Delgado April 26, 2023 November 2024 Andrew Gallegos Mayor Hernandez April 26, 2023 November 2026 Marcos Granados Jr.(Vice C) Mayor Pro Tem Virgen April 26, 2023 November 2026 Karen Hernandez (Vacant) Councilmember Dr. Figueroa April 26, 2023 November 2026 J. Carlos Ayala Alternate (Mayor Hernandez) April 26, 2023 November 2026

Item 25.

City of Coachella Page 3
Committee Membership – 2024
CULTURE AND ARTS COMMISSION – (Meeting dates and times for this new Commission have not yet been established. Meetings will be held at the Corporate Yard located at 53-462 Enterprise Way, Coachella.) The Culture and Arts Commission shall consist of five regular members. Members of commissions shall be appointed for four-year terms or less. The term of each commission member shall continue for the term of the nominating council member and automatically terminate when the council member’s term ends. If a council member is reelected, that council member is entitled to make all new nominations or may choose to re-nominate the council member’s previous nominee.

APPOINTEE NOMINATED BY
(MEMBER OF COUNCIL)

ORIGINAL

APPOINTMENT

TERM EXPIRES
Armando Lerma Mayor Hernandez July 26, 2023 November 2024 Clara Nieblas Mayor Pro Tem Virgen July 26, 2023 November 2026 Irene N. Rodriguez Councilmember Delgado July 26, 2023 November 2024 Juan Ponce Ramos Councilmember Dr. Figueroa July 26, 2023 November 2026 Oralia “Yaya” Ortiz
Javier Figueroa (Alt.)
Councilmember Galarza
Mayor Hernandez
July 26, 2023
July 26, 2023
November 2024
November 2024
YOUTH ADVISORY COMMISSION – (Meeting dates and times for this new Commission have not yet been established. Meetings will be held at the Coachella Civic Center located at 53-990 Enterprise Way, Coachella.) The Youth Advisory Commission shall consist of ten regular members. All members of the commission must live within the City of Coachella and be enrolled in high school. The term of a commissioner is one year from August to June; mirroring the local school district's school year. The term of each commission member shall continue for the term of the nominating council member and automatically terminate when the council member’s term ends. If a council member is reelected, that council member is entitled to make all new nominations or may choose to re-nominate the council member’s previous nominee.

APPOINTEE NOMINATED BY
(MEMBER OF COUNCIL)

ORIGINAL

APPOINTMENT

TERM EXPIRES
Christian Fausto (Chair) Full Council September 25, 2024 June 2025 Alejandro Cobos (Vice Chair) Full Council September 25, 2024 June 2025 Izabella Nunez (Secretary) Full Council September 25, 2024 June 2025 Jade Arguelles Full Council September 25, 2024 June 2025 Briana Lara-Saldivar
Ivan Mendez-Perez
Sehwa Meza
Libni H. Valle
Full Council
Full Council
Full Council
Full Council
September 25, 2024
September 25, 2024
September 25, 2024
September 25, 2024
June 2025
June 2025
June 2025
June 2025

COUNCIL SUB-COMMITTEES
Building/Code Enforcement/Public Safety Sub-Committee – (Meetings called as needed) Neftali Galarza, Councilmember
Dr. Frank Figueroa, Councilmember
City Manager
Development Services Director

Item 25.

City of Coachella Page 4
Committee Membership – 2024
City Engineer
Police Chief
Battalion Chief
Finance Director
Permit Technician (Support Staff)
Code Enforcement
Economic Development/Planning Sub-Committee – (Meetings held on the 1st Thursday of each month at 5:00 p.m. in the Council Chambers of City Hall located at 1515 Sixth Street, Coachella) Steven Hernandez, Mayor – Chair
Stephanie Virgen, Mayor Pro Tem
City Manager
Development Services Director
Economic Development Director
Finance Director
Senior Citizens Advisory Sub-Committee – (Meetings called as needed, if held, on the 3 rd Wednesday
of the month at 1:00 p.m.)
Neftali Galarza, Councilmember
Dr. Frank Figueroa, Councilmember
Public Works Director
Senior Center Coordinator (Support Staff)
Engineering/Public Works/Water-Sewer Sub-Committee – (Meetings called as needed.) Steven Hernandez, Mayor
Denise Delgado, Councilmember
City Manager
Development Services Director
Economic Development Manager
Finance Director
Utilities Department Assistant (Support Staff)
Sister City Sub-Committee – (Meetings called as needed.) Steven Hernandez, Mayor
Neftali Galarza, Councilmember
City Manager
Economic Development Manager
COACHELLA VALLEY ASSOCIATION OF GOVERNMENTS – Dark during the months of March, July, August, October and December*
Executive Committee – (Meetings held on last Monday* at 4:30 p.m.) Steven Hernandez, Mayor, Member
Neftali Galarza, Councilmember, Alternate

Item 25.

City of Coachella Page 5
Committee Membership – 2024
City Manager, Staff
CVAG COMMITTEES – (Continued)
Transportation Committee (TC) – (Meetings held on 1
st Monday* at 10:00 a.m.)
Denise Delgado, Mayor Pro Tem, Member
Neftali Galarza, Councilmember, Alternate
City Engineer, Staff
Homelessness Committee – (Meetings held on 3rd Wednesday* at 10:00 a.m.) Denise Delgado, Councilmember, Member
Dr. Frank Figueroa, Councilmember, Alternate
Economic Development Manager, Staff
Development Services Director, Staff, Alternate
Energy/Environmental Resources – (Meetings held on 2nd Thursday of each month at 12:00 noon) Stephanie Virgen, Mayor Pro Tem, Member
Neftali Galarza, Councilmember, Alternate
Assistant to the City Manager, Staff
Public Safety – (Meetings held on 2
nd Monday* at 9:00 a.m.)
Dr. Frank Figueroa, Councilmember
Denise Delgado, Councilmember
City Manager, Staff
Police Chief
Battalion Chief
Technical Planning Sub-Committee – (Meetings held on 3rd Tuesday* at 11:00 a.m.) Development Services Director, Staff
Senior Planner, Staff, Alternate
Transportation Technical Advisory Sub-Committee – (Meetings held on 4th Monday* at 10:00 a.m.) City Engineer, Staff
Public Works Director, Staff, Alternate
Solid Waste and Recycling Technical Working Group – (Meetings are held quarterly on 2nd Monday at 3:00 p.m.)
Public Works Director, Staff
Environmental/Regulatory Program Manager, Staff, Alternate

Item 25.

City of Coachella Page 6
Committee Membership – 2024
JPA/ Coachella Valley Conservation Commission (CVCC) – (Meetings held on 2nd Thursday of each month at 11:00 a.m.) Dark each March, August, October and December.

Steven Hernandez, Mayor, Member
Dr. Frank Figueroa, Councilmember, Alternate
SUNLINE TRANSIT AGENCY – (Meetings are held on 4th Wednesday of each month at noon in the Board Room, 32505 Harry Oliver Trail, Thousand Palms)
Denise Delgado, Councilmember, Member
Dr. Frank Figueroa, Councilmember, Alternate
COACHELLA VALLEY MOSQUITO & VECTOR CONTROL DISTRICT BOARD – (Meetings are held every 2nd Tuesday of each month at 6:00 p.m. at the District's Ben Laflin Administration Building, 43-420 Trader Place, Indio. Trustees are appointed for a fixed term of either two (2) or four (4) years, Dr. Frank Figueroa, Councilmember (Term Expires January 2024) Public Works Director, Staff
PALM SPRINGS INTERNATIONAL AIRPORT COMMISSION – (Meetings held on 3 rd Wednesday of each
month at 5:30 p.m. The City representative(s) may be council members, community members or staff.) Economic Development Director/Manager
Denise Delgado, Councilmember, Member (Term Expires June 30, 2024 RIVERSIDE COUNTY TRANSPORTATION COMMISSION – (Executive Meetings are held at 9:00 a.m. on the 2
nd Wednesday of each month; and the Budget and Implementation meetings are held at 9:30 a.m. on the 4th Monday of each month at the County of Riverside Administrative Center, 4080 Lemon Street, Riverside. Video teleconferencing is available from La Quinta City Hall.

Steven Hernandez, Mayor, Member – Executive
Stephanie Virgen, Mayor Pro Tem, Member – Budget and Implementation City Engineer, Staff, TAC Member
Public Works Director, Staff, TAC Alternate
PUBLIC ENTITIES RISK MANAGEMENT AUTHORITY (PERMA) – (Meetings at the DoubleTree Resort 67-967 Vista Chino, Cathedral City. Held quarterly, 1st Thursday of last month of each quarter.) Human Resources Manager, Staff, Member
Finance Director, Staff, Alternate
ABANDONED VEHICLE AUTHORITY – (Meetings held quarterly. Date and location for next meeting are announced at each meeting. Locations hosted by different cities.) Finance Director, Member
Code Compliance Manager, Alternate

Item 25.

City of Coachella Page 7
Committee Membership – 2024
SOUTHERN CALIFORNIA ASSOCIATION OF GOVERNMENTS – Three assignments: 1) Community, Economic and Human Development Committee (CEHD) – (Meetings are held from 10 a.m. – 12:00 noon, followed by the 2) Regional Council (RC) from 12:15 – 2:00 p.m.) on the first Thursday of each month; and 3) Legislative/Communications and Membership Committee (LCMC) meets from 8:30 a.m. – 10:00 a.m. on the 3rd Tuesday of each month in Los Angeles at 818 W. 7th Street, 12th Floor; contact number is 213-236-1800).

Denise Delgado, Councilmember, Member
SOUTHERN CALIFORNIA ASSOCIATION OF GOVERNMENTS – General Assembly – (Meetings are held At least once every year (usually in April or May).

Denise Delgado, Councilmember, Voting Delegate
COACHELLA/INDIO WASTE TRANSFER STATION JOINT POWERS AUTHORITY – (Meetings held at as needed, at Coachella City Hall located at 1515 Sixth Street, Coachella.) Steve Hernandez, Mayor, Board Member
Dr. Frank Figueroa, Councilmember, Alternate
Public Works Director, Staff
WASTE MANAGEMENT CONTRACT AMENDMENT - AD HOC COMMITTEE – (Held as needed.) Stephanie Virgen, Mayor Pro Tem
Steven Hernandez, Mayor
NPDES TASK FORCE – (Meetings held first Wednesday of each month at 10 a.m.) Environmental/Regulatory Program Manager, Member
Sanitary Superintendent, Member
CHAMBER OF COMMERCE LIAISON – (Meetings held as needed) Neftali Galarza, Councilmember
Dr. Frank Figueroa, Councilmember
Assistant to the City Manager, Staff
Executive Assistant, Staff
JOINT WATER POLICY ADVISORY COMMITTEE MEETING – (As needed at CVWD’S Coachella office, 85-995 Avenue 52, Coachella, Rummonds Training Room.)
Steven Hernandez, Mayor, Member
Dr. Frank Figueroa, Councilmember, Alternate
Utilities Manager, Staff

Item 25.

City of Coachella Page 8
Committee Membership – 2024
COACHELLA VALLEY ANIMAL CAMPUS COMMISSION – (Meetings held on 1 st Thursday, every two
months at 9:30 a.m. at the Coachella Valley Animal Campus, 72-050 Pet Land Place, Thousand Palms, CA 92276 Denise Delgado, Councilmember, Member
Dr. Frank Figueroa, Alternate
City Manager, Staff
COACHELLA VALLEY ENERGY COMMISSION – (Meetings held at 4:00 p.m. on the second Thursday of each month. Meetings may be held at the IID Boardroom at its La Quinta Headquarters, 81-600 Avenue 58 La Quinta, or rotating at member agency locations. Commission members are appointed for one-year terms with no term limits, and must reside within the IID boundary area for the Coachella Valley. (New for 2021) Stephanie Virgen, Mayor Pro Tem, Member (Term Expires December 2024) UTILITY USERS CITIZENS OVERSIGHT COMMITTEE – (Meetings held at [time] on the [day] of each month. Meetings will be held at [location and address]
Member
Staff
COACHELLA VALLEY MOUNTAINS CONSERVANCY – (Meetings held at 3:00 p.m. on the 2nd Monday of January, March, May, July, September and November at Conference Room 115, 73-710 Fred Waring Drive, Palm Desert. Terms are for 2-years. Appointees must be either the Mayor or a Councilmember.) Denise Delgado, Councilmember, Member (Term Expires December 2024 – 2-year term) Dr. Frank Figueroa, Councilmember, Alternate
Development Services Director, Staff, non-member
VISIT GREATER PALM SPRINGS JOINT POWERS AUTHORITY – (Six (6) Meetings are held yearly on Fridays, 8:00 am to 10:30 am. [Locations and Dates TBD] Dr. Frank Figueroa, Member
Alternate: TBD

Item 25.

FPPC Form 806 (1/18)
FPPC Toll-Free Helpline: 866/ASK-FPPC (866/275-3772)
Comment:

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13 1/16/2025
City of Coachella
City Council
Delia Granados, Deputy City Clerk
(760) 398-3502 [email protected]
Coachella Valley
Association of
Governments (CVAG)
Executive Committee
Hernandez, Steven
Galarza, Neftali 1 Year
125
■
Coachella Valley
Association of
Governments (CVAG)
Transportation Committee
Delgado, Denise
Galarza, Neftali 1 Year
100
■
Coachella Valley
Association of
Governments (CVAG)
Homelessness
Delgado, Denise
Figueroa, Frank 1 Year
100
■
Coachella Valley
Association of
Governments (CVAG)
Energy Environmental
Resource Committee
Virgen, Stephanie
Galarza, Neftali 1 Year
100
■
Delia Granados Deputy City Clerk 1/16/2025
Print Clear Page 600
Item 25.

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FPPC Toll-Free Helpline: 866/ASK-FPPC (866/275-3772)
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City of Coachella
1/16/2025
Coachella Valley
Association of
Governments (CVAG)
Public Safety Committee
Figueroa, Frank
Delgado, Denise
1/24/2024
1 Year
100
■
Coachella Valley
Conservation Commission
(CVCC)
Hernandez, Steven
Figueroa, Frank
1/24/2024
1 Year
100
■
Sunline Transit Agency
1) Board
2) Finance Committee
3) Taxi Committee
4) Chairman Executive
Committee ($50x1)
Delgado, Denise
Figueroa, Frank
1/24/2024
1 Year
25 ■
Coachella Valley
Mosquito & Vector Control
District Board
Figueroa, Frank 1/24/2024
1 Year
100
■
Riverside County
Transportation
Commission (RCTC)
Hernandez, Steven
Virgen, Stephanie
1/24/2024
1 Year
120
■
Coachella/Indio Transfer
Joint Powers Authority Hernandez, Steven
Figueroa, Frank
1/24/2024
1 Year
50 ■
Print Clear Page 601
Item 25.

FPPC Form 806 (1/18)
FPPC Toll-Free Helpline: 866/ASK-FPPC (866/275-3772)
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Length of Term
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Page _____ of _____ 33
City of Coachella
1/16/2025
Coachella Valley
Mountains Conservancy Delgado, Denise
Figueroa, Frank
1/24/2024
1 Year
75 ■
Southern California
Association of
Governments General
Assembly
Delgado, Denise 1/24/2024
1 Year
120
■
Palm Springs International
Airport Commission Delgado, Denise 1/24/2024
1 Year
75 ■
Print Clear Page 602
Item 25.

TO: Honorable Mayor and City Council
FROM: Best Best & Krieger LLP, City Attorney
SUBJECT: Appointment of William Pattison as City Manager on an Interim Basis

STAFF RECOMMENDATION
Staff recommends that the City Council consider approving the following items:

1. CalPERS Retiree Limited-Term Appointment Agreement.

2. Resolution Finding the Position of City Manager to be Available Due to a Leave of Absence Pursuant to Government Code Section 21221(g) and Appointing William Pattison as Acting City Manager.

DISCUSSION/ANALYSIS
William Pattison retired from the City at the end of 2020. He subsequently served as City Manager on an interim basis. Now, with the approval of this item, Mr. Pattison would return to the City and be appointed the Acting City Manager effective January 23, 2025 and would be hired for a single limited term appointment to perform duties of the City Manager. Given the need for continuity and a highly trained professional to lead the City Manager’s Office, this item is being brought forward for the City Council’s consideration. As a CalPERS retired annuitant, Mr. Pattison’s hours working for the City, and any other CalPERS employer, cannot exceed 960- hours in the fiscal year, unless an exception applies.

Mr. Pattison has about 30 years of experience in city management. Thus, Mr. Pattison has the specialized skills necessary to perform the duties of City Manager on an interim basis.

Included in the Council’s agenda packet is the proposed agreement and the resolutions to appoint a retiree pursuant to Government Code Sections 21221(g).

FISCAL IMPACT
Mr. Pattison would be paid an hourly rate of $137.98 per hour. He will not be entitled to any additional compensation, overtime, benefits, paid leave or paid holidays, unless required by federal or state law.

STAFF REPORT
January 22, 2025

Item 26.

ALTERNATIVES
Council may provide additional alternatives.

ATTACHMENTS:

1. CalPERS Retiree Limited-Term Appointment Agreement.

2. Resolution Finding the Position of City Manager to be Available Due to a Leave of Absence Pursuant to Government Code Section 21221(g) and Appointing William Pattison as Acting City Manager (will be uploaded after the posting of the agenda).

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CITY OF COACHELLA

CALPERS RETIREE LIMITED-TERM APPOINTMENT AGREEMENT
This Employment Agreement (“Agreement”) is made and entered into as of January 22, 2025, by and between the City of Coachella (“City”), a California municipal corporation, and William Pattison (“Retiree”), an individual, on the terms and conditions contained herein. City and Retiree are sometimes referred to in this Agreement individually as “Party” and collectively as “Parties.”

RECITALS
A. City desires to employ the services of Retiree as its Acting City Manager to carry out the duties and responsibilities of the City Manager position, as provided for by the Coachella Municipal Code and applicable state law, during the leave of absence of the incumbent City Manager in consideration of and subject to the terms, conditions, and benefits set forth in this Agreement.

B. Retiree desires to accept employment as Acting City Manager in consideration of and subject to the terms, conditions, and benefits set forth in this Agreement.

C. Retiree’s employment is authorized by Government Code Sections 7522.56 and 21221(g), which authorizes the temporary employment of retirees in accordance with the Public Employees’ Retirement Law, as administered by the California Public Employees’ Retirement System (CalPERS), and permits a contracting agency to employ a CalPERS retiree for a period not to exceed one year in a position found to be available by the City Council due to a leave of absence granted to an employee on payroll status and requiring specialized skills.

D. The City Council made the necessary findings at its meeting on January 22 2025 and appointed Retiree as Acting City Manager pursuant to Resolution No. _____.

E. Retiree represents that he is a retired annuitant of CalPERS within the meaning of Government Code Sections 7522.56 and 21221(g) (“Statutes”) and acknowledges that his compensation is statutorily limited as provided in Government Code section 7522.56. Retiree represents that, as of the effective date of this Agreement, he has not worked for another CalPERS state or contracting agency as a retired annuitant during the 2024-2025 fiscal year, and that he therefore acknowledges that he can work up to 960 hours, unless an exception applies, for the City, a state agency or other CalPERS contracting agencies (collectively “CalPERS Agencies”) during the 2024-2025 fiscal year.

F. With the execution of this Agreement, Retiree affirms that he has not received unemployment compensation from any CalPERS Agencies during the 12-month period preceding the effective date of this Agreement.

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G. The City has determined that it is necessary to hire Retiree, a CalPERS retiree, because the position of Acting City Manager requires special skills, and Retiree, by virtue of his significant experience as city manager, has those special skills.

OPERATIVE PROVISIONS
In consideration of the promises and covenants contained herein, the Parties agree as follows:

1. Position and Duties.

1.1 Position. Retiree accepts employment with City as its Acting City Manager and shall perform all functions, duties and services set forth in Section 1.4 [Duties] of this Agreement.

Retiree shall provide service at the direction and under the supervision of the City Council. It is the intent of the Parties that Retiree, as the Acting City Manager, shall keep the City Council fully apprised of all significant ongoing operations of City. Toward that end, Retiree shall report directly to the City Council and will periodically, or as may be otherwise specifically requested by the City Council, provide status reports to the City Council on his activities and those of the City.

1.2 Term. This Agreement shall become effective on January 23, 2025, unless a later date is agreed on by the Parties. This Agreement shall expire upon whichever of the following events occurs first: (1) when the leave of absence of the incumbent City Manager terminates, or (2) the position of City Manager becomes vacant, or (3) either the City or Retiree terminate this Agreement. However, in no event shall this appointment exceed one year.

1.3 At-Will. Retiree acknowledges that he is an at-will, temporary employee of City who shall serve at the pleasure of the City Council at all times during the period of his service hereunder. Nothing in this Agreement is intended to, or does, confer upon Retiree any right to any property interest in continued employment, or any due process right to a hearing before or after a decision by the City Council to terminate his employment, except as is expressly provided in Section 1.2 [Term] or Section 4 [Termination] of this Agreement. Further, nothing contained in this Agreement shall in any way prevent, limit or otherwise interfere with the right of City to terminate the services of Retiree, as provided in Section 1.2 [Term] or Section 4 [Termination] of this Agreement.

1.4 Duties. Retiree shall perform those duties and have those responsibilities that are commonly assigned to a city manager of a city in California, and as may be further set forth in the City’s Municipal Code, as well as those duties set forth in the City’s classification specification for City Manager, if any.

1.5 Hours of Work. Retiree shall devote the time necessary to adequately perform his duties as Acting City Manager. It is recognized that Retiree will devote a great deal of time outside the normal office hours-schedule, and to that end, he shall be allowed to establish an appropriate work schedule. However in no event shall Retiree be required to work in excess of 960 hours per fiscal year for the City, including hours worked for other CalPERS Agencies during such fiscal years, unless an exception applies. Any hours worked by Retiree to ensure adequate staffing

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during a declared state of emergency will not count toward the 960-hour limit per fiscal year. The position of Acting City Manager shall be deemed a non-exempt position under California wage and hour law.

1.6 Devotion to City Business. The Acting City Manager position is full-time. Retiree shall not engage in any business, educational, professional, charitable, or other activities that would conflict or materially interfere with performance of his Acting City Manager duties, except as may be specifically authorized by the City Council.

2. Compensation.

2.1 Rate of Pay. For all services performed by Retiree as the Acting City Manager under this Agreement, City shall pay Retiree compensation at the rate of One Hundred Thirty-Seven Dollars and Ninety-Eight cents ($137.98) per hour, according to the payroll schedule in place for City employees paid bi-weekly subject to the limitations provided below.

2.1.1 Compliance with CalPERS requirements. It is the intent of the Parties to compensate Retiree only to the extent permitted under Government Code section 7522.56 and corresponding CalPERS regulations and policy statements. The Rate of Pay set forth above is based on the salary limitations established by Ca1PERS and is not less than the minimum, nor in excess of the maximum, paid by the City to other employees performing comparable duties (divided by 173.333 to equal an hourly rate) as listed on the City’s publicly-available pay schedule. Such compensation shall be Retiree’s sole compensation for his service under this Agreement. Notwithstanding the foregoing, the City shall pay for workers’ compensation insurance for Retiree.

2.1.2 Recordation and Reporting of Hours Worked. Retiree will comply with all applicable CalPERS regulations governing employment after retirement, including the recordation and reporting of all hours worked for City to Ca1PERS as may be required. City shall assist in any such reporting obligations to Ca1PERS. Additionally, Retiree shall keep City continually apprised of any hours worked by Retiree for other CalPERS Agencies during the term of this Agreement.

2.2 Benefits.

2.2.1 No Benefits. Retiree shall not receive from City any benefits City commonly provides to its employees unless required by federal or state law, including without limitation, health, dental, or vision insurance coverage, life insurance, deferred compensation, disability insurance, unemployment insurance, vehicle allowance, gym programs, employee assistance programs, and similar benefits.

2.4 Reimbursement. City shall reimburse Retiree for authorized, reasonable and necessary travel expenses incurred by Retiree in the performance of his duties pursuant to this Agreement. Retiree shall document and claim said reimbursement for such travel in the manner and forms required by the City. All reimbursements shall be for actual expenses and shall be subject to and in accordance with California and federal law and City’s adopted reimbursement

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policies. Such reimbursements shall not be reported to CalPERS. Other than as specifically provided herein, Retiree shall receive no other compensation or reimbursements for expenses incurred by him in performance of this Agreement.

3. Vacation and Leave.

3.1 No Leave. Retiree and City agree that Retiree shall not be provided or accrue any personal time off, vacation, sick leave, administrative leave, paid holidays or similar leave benefits, unless required by federal or state law.

4. Termination.

4.1 By City. This Agreement may be terminated by City for any reason and at any time after providing written notice to Retiree of such termination. City’s only obligation in the event of such termination will be payment to Retiree of all compensation then due and owing as set forth in Section 2.1 [Rate of Pay] up to and including the effective date of termination.

4.2 By Retiree. This Agreement may be terminated by Retiree for any reason thirty (30) days after providing written notice to City of such termination. City shall have the option, in its complete discretion, to make Retiree’s termination effective at any time prior to the end of such period, provided City pays Retiree all compensation as set forth in Section 2.1 [Rate of Pay] then due and owing him through the last day actually worked.

4.3 No Notice for Expiration. Nothing in this Section 4 [Termination] shall be construed to require either party to give advance written notice in order for the Agreement to expire as set forth in Section 1.2 [Term].

4.4 Termination Obligations. Retiree agrees that all property, including, without limitation, all equipment, tangible Proprietary Information (as defined below), documents, records, notes, contracts, and computer-generated materials furnished to or prepared by him incident to his employment belongs to City and shall be returned promptly to City upon termination of Retiree’s employment. Retiree’s obligations under this subsection shall survive the termination of his employment and the expiration of this Agreement.

5. Confidential Information.
“Confidential Information” shall include, but not be limited to, all information or material that Retiree learns of or obtains during his employment with City as Acting City Manager that is or was confidential or privileged by virtue of it having been discussed or presented in a dulynoticed closed session meeting of the City Council, or otherwise privileged and/or confidential under applicable law, including but not limited to personnel information, information pertaining to on-going or potential litigation, information learned in the context of the attorney-client relationship with the City Attorney or special counsel to the City. Confidential Information as defined includes, but is not limited to, all data, materials, products, technology, computer programs, specifications, manuals, business plans, software, marketing plans, financial information, internal processes and procedures, and other information disclosed or submitted,

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orally, in writing, or by any other media, to Retiree by City. Nothing herein shall require City to disclose any of its information to Retiree.

During his employment with City as Acting City Manager, Retiree shall use and disclose Confidential Information only for the benefit of City and as is, or may be, necessary to perform his job responsibilities under this Agreement. Following the termination of this Agreement, Retiree shall not use or disclose any Confidential Information, except with the express written consent of City. Retiree’s obligations under this Section shall survive the termination of his employment and the expiration of this Agreement.

6. Conflict Of Interest.

Retiree represents and warrants to City that he presently has no interest, and represents that he will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or interfere in any way with performance of his services under this Agreement.

7. General Provisions.

7.1 Recitals. The recitals, inclusive of all facts and representations, are incorporated into this Agreement as if set forth in the Operative Provisions.

7.2 Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be effective upon delivery by hand or three (3) business days after deposit in the United States mail, postage prepaid, certified or registered, and addressed to City at the address below, and or at the last known address maintained in Retiree’s personnel file. Retiree agrees to notify City in writing of any change in his address during his employment with City. Notice of change of address shall be effective only when accomplished in accordance with this Section.

City’s Notice Address:

City of Coachella
53990 Enterprise Way
Coachella, CA 92236
Attn: City Clerk
Acting City Manager’s Address:

William Pattison
[Address on File with Human Resources]

7.4 Bonding. City shall bear the full cost of any fidelity or other bonds required of the Acting City Manager under any law or ordinance.

7.5 Integration. This Agreement is intended to be the final, complete, and exclusive statement of the terms of Retiree’s employment by City. This Agreement supersedes all other prior and contemporaneous agreements and statements, whether written or oral, express or implied, pertaining in any manner to the employment of Retiree, and it may not be contradicted by evidence

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of any prior or contemporaneous statements or agreements. To the extent that the practices, policies, or procedures of City, now or in the future, apply to Retiree and are inconsistent with the terms of this Agreement, the provisions of this Agreement shall control.

7.6 Amendments. This Agreement may not be amended except in a written document signed by Retiree and Mayor, as authorized by the City Council.

7.7 Waiver. Failure to exercise any right under this Agreement shall not constitute a waiver of such right.

7.9 Assignment. Retiree shall not assign any rights or obligations under this Agreement. City may, upon prior written notice to Retiree, assign its rights and obligations hereunder.

7.10 Severability. If a court or arbitrator holds any provision of this Agreement to be invalid, unenforceable, or void, the remainder of this Agreement shall remain in full force and effect.

7.11 Attorneys’ Fees. In any legal action, arbitration, or other proceeding brought to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs.

7.12 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, with venue proper only in Riverside County, State of California.

7.13 Interpretation. This Agreement shall be construed as a whole, according to its fair meaning, and not in favor of or against any party. By way of example and not in limitation, this Agreement shall not be construed in favor of the party receiving a benefit nor against the party responsible for any particular language in this Agreement. Captions are used for reference purposes only and should be ignored in the interpretation of the Agreement. This Agreement may be altered, amended or modified only by an instrument in writing, executed by the Parties to this Agreement and by no other means. Each party waives their future right to claim, contest or assert that this Agreement was modified, cancelled superseded or changed by any oral agreement, course of conduct, waiver or estoppel.

7.14 Acknowledgment. Retiree acknowledges that he has had the opportunity to consult legal counsel in regard to this Agreement, that he has read and understands this Agreement, that he is fully aware of its legal effect, and that he has entered into it freely and voluntarily and based on his own judgment and not on any representations or promises other than those contained in this Agreement.

7.15 Abuse of Office; Reimbursement to City. Pursuant to Government Code section 53243, et seq., if Retiree is convicted of a crime involving an abuse of his office or position, all of the following shall apply: (1) if Retiree is provided with administrative leave pay pending an investigation, Retiree shall be required to fully reimburse such amounts paid; (2) if the City pays for the criminal legal defense of Retiree (which would be in its sole discretion, as it is generally

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not obligated to pay for a criminal defense), Retiree shall be required to fully reimburse such amounts paid; and (3) if this Agreement is terminated, any cash settlement related to the termination that Retiree may receive from the City shall be fully reimbursed to the City. For this Section, abuse of office or position means either: (1) an abuse of public authority, including waste, fraud, and violation of the law under color of authority; or (2) a crime against public justice, including a crime described in Title 7 commencing with section 92 of the Penal Code.

IN WITNESS WHEREOF, City has caused this Agreement to be signed and executed on its behalf by its Mayor and duly attested to by its City Clerk, and Retiree has signed and executed this Agreement, as of the date first indicated above.

ACTING CITY MANAGER CITY OF COACHELLA
____________________________ _________________________
William Pattison Stephen Hernandez, Mayor
ATTEST: APPROVED AS TO FORM:
_______________________________ __________________________ Angela M. Zepeda, City Clerk Best Best & Krieger LLP
City Attorney