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NON-EXCLUSIVE MASTER SERVICES AGREEMENT BETWEEN THE CITY OF GONZALES
AND LECHOWICZ & TSENG FOR WATER, SEWER, AND INDUSTRIAL SEWER RATE STUDIES THIS AGREEMENT for consulting services is made by and between the City of Gonzales ("City") and Lechowicz & Tseng ("Consultant") (together sometimes referred to as the "Parties") as of November 21, 2022 (the "Effective Date").
Section 1. SCOPE OF SERVICES. Subject to the terms and conditions set forth in this Agreement, Consultant shall provide to City the services described in the Scope of Work attached as Exhibit A at the time and place and in the manner specified therein. In the event of a conflict in or inconsistency between the terms of this Agreement and Exhibit A, the Agreement shall prevail.
1.1 Term of Services. The term of this Agreement shall begin on the Effective Date and shall end on June 30, 2026, unless the term of the Agreement is otherwise terminated or extended, as provided for in Section 8. The time provided to Consultant to complete the services required by this Agreement shall not affect the City's right to terminate the Agreement, as referenced in Section 8.
1.2 Standard of Performance. Consultant shall perform all services required pursuant to this Agreement in the manner and according to the standards observed by a competent practitioner of the profession in which Consultant is engaged.
1.3 Assignment of Personnel. Consultant shall assign only competent personnel to perform services pursuant to this Agreement. In the event that City, in its sole discretion, at any time during the term of this Agreement, desires the reassignment of any such persons, Consultant shall, immediately upon receiving notice from City of such desire of City, reassign such person or persons.
1.4 Time. All work performed under this Agreement shall be authorized in advance and in writing by a specific Task Order prior to the commencement of services. Each Task Order shall describe the nature of the specific task or service to be performed by the Consultant, the estimated number of hours within which such task or service must be completed and the compensation for such task or service. Details shall include a description of the task or service which Consultant shall perform, the format and schedule for deliverables, the schedule of performance, and the schedule of compensation. Consultant shall not perform any task or service unless authorized by a fully executed Task Order. Consultant shall advise city staff in writing of any anticipated change in any task or service, fee or time schedule, and shall obtain city staff’s written consent to the change prior to making any changes.
1.5 Time. Consultant shall devote such time to the performance of services pursuant to this Agreement as may be reasonably necessary to meet the standard of performance provided in Section 1.1 above and to satisfy Consultant's obligations hereunder.
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Section 2. COMPENSATION. The City will pay Consultant’s invoices under each authorized Task Order on an hourly not-to-exceed basis. The hourly rates in Exhibit B apply to all Task Orders. City shall pay Consultant for services rendered pursuant to this Agreement from deposits made by development applicants at the time and in the manner set forth herein. The payments specified below shall be the only payments from City to Consultant for services rendered pursuant to this Agreement. Consultant shall submit all invoices to City in the manner specified herein. Except as specifically authorized by City in writing, Consultant shall not bill City for duplicate services performed by more than one person.
Consultant and City acknowledge and agree that compensation paid by City to Consultant under this Agreement is based upon Consultant's estimated costs of providing the services required hereunder, including salaries and benefits of employees and subcontractors of Consultant. Consequently, the parties further agree that compensation hereunder is intended to include the costs of contributions to any pensions and/or annuities to which Consultant and its employees, agents, and subcontractors may be eligible. City therefore has no responsibility for such contributions beyond compensation required under this Agreement.
2.1 Invoices. Consultant shall submit invoices, not more often than once a month during the term of this Agreement, based on the cost for services performed and reimbursable costs incurred prior to the invoice date. Invoices shall contain the following information:
Serial identifications of invoices; i.e., Progress Bill No. 1 for the first invoice, etc.; The beginning and ending dates of the billing period; A Task Summary containing the original contract amount, the amount of prior billings, the total due this period, the balance available under the Agreement, and the percentage of completion;
For each work item under each task, a copy of the applicable time entries or time sheets shall be submitted showing the name of the person doing the work, the hours spent by each person, a brief description of the work, and each reimbursable expense;
The total number of hours of work performed under the Agreement by Consultant and each employee, agent, and subcontractor of Consultant performing services hereunder;
Consultant shall give separate notice to the City when the total number of hours worked by Consultant and any individual employee, agent, or subcontractor of Consultant reaches or exceeds 800 hours within a 12-month period under this Agreement and any other agreement between Consultant and City. Such notice shall include an estimate of the time necessary to complete work described in Exhibit A and the estimate of time necessary to complete work under any other agreement between Consultant and City, if applicable.
2.2 Monthly Payment. City shall make payments, based on invoices received, for services satisfactorily performed, and for authorized reimbursable costs incurred. City shall have 30 days from the receipt of an invoice that complies with all of the requirements above to pay Consultant. Notwithstanding, Consultant and City acknowledge that payment for Consultant’s services are fully dependent on development applicants’ deposits and that the timing of City’s invoice payment may be adversely impacted by inadequate applicant Consulting Services Agreement between November 21, 2022 City of Gonzales and Lechowicz & Tseng Page 3 of 13
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funds. City shall make a good -faith effort to ensure that all development applicant accounts are maintained at a level to cover Consultant’s anticipated costs.
2.3 <<Not Used>>
2.4 Total Payment. City shall pay for the services to be rendered by Consultant pursuant to this Agreement. City shall not pay any additional sum for any expense or cost whatsoever incurred by Consultant in rendering services pursuant to this Agreement. City shall make no payment for any extra, further, or additional service pursuant to this Agreement.
In no event shall Consultant submit any invoice for an amount in excess of the maximum amount of compensation provided above either for a task or for the entire Agreement, unless the Agreement is modified prior to the submission of such an invoice by a properly executed change order or amendment.
2.5 Hourly Fees. Fees for work performed by Consultant on an hourly basis shall not exceed the amounts shown on the compensation schedule attached hereto as Exhibit B.
2.6 Reimbursable Expenses. Any reimbursable expenses are included in the authorized contract amount and shall be approved by city staff in advance.
2.7 Payment of Taxes. Consultant is solely responsible for the payment of employment taxes incurred under this Agreement and any similar federal or state taxes.
2.8 Payment upon Termination. In the event that the City or Consultant terminates this Agreement pursuant to Section 8, the City shall compensate the Consultant for all outstanding costs and reimbursable expenses incurred for work satisfactorily completed as of the date of written notice of termination. Consultant shall maintain adequate logs and timesheets to verify costs incurred to that date.
2.9 Authorization to Perform Services. The Consultant is not authorized to perform any services or incur any costs whatsoever under the terms of this Agreement until receipt of authorization from the Contract Administrator.
Section 3. FACILITIES AND EQUIPMENT. Consultant shall, at its sole cost and expense, provide all facilities and equipment that may be necessary to perform the services required by this Agreement.
Section 4. INSURANCE REQUIREMENTS. Before beginning any work under this Agreement, Consultant, at its own cost and expense, unless otherwise specified below, shall procure the types and amounts of insurance listed below against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work hereunder by the Consultant and its agents, representatives, employees, and subcontractors. Consistent with the following provisions, Consultant shall provide proof satisfactory to City of such insurance that meets the requirements of this section and under forms of insurance satisfactory in all respects, and that such insurance is in effect prior to beginning work to the City. Consultant shall maintain the insurance policies required by this section throughout the term of Consulting Services Agreement between November 21, 2022 City of Gonzales and Lechowicz & Tseng Page 4 of 13
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this Agreement. The cost of such insurance shall be included in the Consultant's bid. Consultant shall not allow any subcontractor to commence work on any subcontract until Consultant has obtained all insurance required herein for the subcontractor(s) and provided evidence that such insurance is in effect to City.
Verification of the required insurance shall be submitted and made part of this Agreement prior to execution. Consultant shall maintain all required insurance listed herein for the duration of this Agreement.
4.1 Workers' Compensation. Consultant shall, at its sole cost and expense, maintain Statutory Workers' Compensation Insurance and Employer's Liability Insurance for any and all persons employed directly or indirectly by Consultant. The Statutory Workers' Compensation Insurance and Employer's Liability Insurance shall be provided with limits of not less than $1,000,000 per accident. In the alternative, Consultant may rely on a selfinsurance program to meet those requirements, but only if the program of self-insurance complies fully with the provisions of the California Labor Code. Determination of whether a self-insurance program meets the standards of the Labor Code shall be solely in the discretion of the Contract Administrator. The insurer, if insurance is provided, or the Consultant, if a program of self-insurance is provided, shall waive all rights of subrogation against the City and its officers, officials, employees, and volunteers for loss arising from work performed under this Agreement.
4.2 Commercial General and Automobile Liability Insurance.
4.2.1 General requirements. Consultant, at its own cost and expense, shall maintain commercial general and automobile liability insurance for the term of this Agreement in an amount not less than $1,000,000 per occurrence, combined single limit coverage for risks associated with the work contemplated by this Agreement. If a Commercial General Liability Insurance or an Automobile Liability form or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement or the general aggregate limit shall be at least twice the required occurrence limit. Such coverage shall include but shall not be limited to, protection against claims arising from bodily and personal injury, including death resulting therefrom, and damage to property resulting from activities contemplated under this Agreement, including the use of owned and non-owned automobiles.
4.2.2 Minimum scope of coverage. Commercial general coverage shall be at least as broad as Insurance Services Office Commercial General Liability occurrence form CG 0001 (most recent edition) covering comprehensive General Liability on an "occurrence" basis. Automobile coverage shall be at least as broad as Insurance Services Office Automobile Liability form CA 0001, Code 1 (any auto). No endorsement shall be attached limiting the coverage.
4.2.3 Additional requirements. Each of the following shall be included in the insurance coverage or added as a certified endorsement to the policy:
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a. The Insurance shall cover on an occurrence or an accident basis, and not on a claims-made basis.
b. City, its officers, officials, employees, and volunteers are to be covered as insureds as respects: liability arising out of work or operations performed by or on behalf of the Consultant; or automobiles owned, leased, hired, or borrowed by the Consultant.
c. For any claims related to this Agreement or the work hereunder, the Consultant's insurance covered shall be primary insurance as respects the City, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers shall be excess of the Consultant's insurance and shall not contribute with it.
d. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be canceled by either party, except after 30 days' prior written notice has been provided to the City.
4.3 Professional Liability Insurance.
4.3.1 General requirements. Consultant, at its own cost and expense, shall maintain for the period covered by this Agreement professional liability insurance for licensed professionals performing work pursuant to this Agreement in an amount not less than $1,000,000 covering the licensed professionals' errors and omissions. Any deductible or self-insured retention shall not exceed $150,000 per claim.
4.3.2 Claims-made limitations. The following provisions shall apply if the professional liability coverage is written on a claims-made form:
a. The retroactive date of the policy must be shown and must be before the date of the Agreement.
b. Insurance must be maintained and evidence of insurance must be provided for at least five years after completion of the Agreement or the work, so long as commercially available at reasonable rates. c. If coverage is canceled or not renewed and it is not replaced with another claims-made policy form with a retroactive date that precedes the date of this Agreement, Consultant shall purchase an extended period coverage for a minimum of five years after completion of work under this Agreement.
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d. A copy of the claim reporting requirements must be submitted to the City for review prior to the commencement of any work under this Agreement.
4.3.3 Additional Requirements. A certified endorsement to include contractual liability shall be included in the policy.
4.4 All Policies Requirements.
4.4.1 Acceptability of insurers. All insurance required by this section is to be placed with insurers with a Bests' rating of no less than A:VII.
4.4.2 Verification of coverage. Prior to beginning any work under this Agreement, Consultant shall furnish City with complete copies of all policies delivered to Consultant by the insurer, including complete copies of all endorsements attached to those policies. All copies of policies and certified endorsements shall show the signature of a person authorized by that insurer to bind coverage on its behalf. If the City does not receive the required insurance documents prior to the Consultant beginning work, it shall not waive the Consultant's obligation to provide them. The City reserves the right to require complete copies of all required insurance policies at any time.
4.4.3 Deductibles and Self-Insured Retentions. Consultant shall disclose to and obtain the written approval of City for the self-insured retentions and deductibles before beginning any of the services or work called for by any term of this Agreement. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, employees, and volunteers; or the Consultant shall provide a financial guarantee satisfactory to the City guaranteeing payment of losses and related investigations, claim administration and defense expenses.
4.4.4 Wasting Policies. No policy required by this Section 4 shall include a "wasting" policy limit (i.e., limit that is eroded by the cost of defense).
4.4.5 Waiver of Subrogation. Consultant hereby agrees to waive subrogation which any insurer or contractor may require from vendor by virtue of the payment of any loss. Consultant agrees to obtain any endorsements that may be necessary to affect this waiver of subrogation.
The Workers' Compensation policy shall be endorsed with a waiver of subrogation in favor of the entity for all work performed by the consultant, its employees, agents, and subcontractors.
4.4.6 Subcontractors. Consultant shall include all subcontractors as insureds under its policies or shall furnish separate certificates and certified endorsements for each Consulting Services Agreement between November 21, 2022 City of Gonzales and Lechowicz & Tseng Page 7 of 13
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subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein.
4.5 Remedies. In addition to any other remedies City may have if Consultant fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, City may, at its sole option exercise any of the following remedies, which are alternatives to other remedies City may have and are not the exclusive remedy for Consultant's breach:
Obtain such insurance and deduct and retain the amount of the premiums for such insurance from any sums due under the Agreement;
Order Consultant to stop work under this Agreement or withhold any payment that becomes due to Consultant hereunder, or both stop work and withhold any payment, until Consultant demonstrates compliance with the requirements hereof; and/or Terminate this Agreement.
Section 5. INDEMNIFICATION AND CONSULTANT'S RESPONSIBILITIES. Consultant shall, to the fullest extent allowed by law, with respect to all Services performed in connection with this Agreement, defend with counsel acceptable to City, indemnify, and hold City, its officers, employees, agents, and volunteers, harmless from and against any and all claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, ("Claims"). Consultant will bear all losses, costs, damages, expense and liability of every kind, nature and description that arise out of, pertain to, or relate to such Claims, whether directly or indirectly ("Liability"). Such obligations to defend, hold harmless and indemnify the City shall not apply to the extent that such Liabilities are caused by the sole negligence, active negligence, or willful misconduct of the City.
With respect to third party claims against the Consultant, the Consultant waives any and all rights of any type of express or implied indemnity against the Indemnitees.
Section 6. STATUS OF CONSULTANT.
6.1 Independent Contractor. At all times during the term of this Agreement, Consultant shall be an independent contractor and shall not be an employee of City. City shall have the right to control Consultant only insofar as the results of Consultant's services rendered pursuant to this Agreement and assignment of personnel pursuant to Subparagraph 1.3; however, otherwise City shall not have the right to control the means by which Consultant accomplishes services rendered pursuant to this Agreement. Notwithstanding any other City, state, or federal policy, rule, regulation, law, or ordinance to the contrary, Consultant and any of its employees, agents, and subcontractors providing services under this Agreement shall not qualify for or become entitled to, and hereby agree to waive any and all claims to, any compensation, benefit, or any incident of employment by City, including but not limited to eligibility to enroll in the California Public Employees Retirement System Consulting Services Agreement between November 21, 2022 City of Gonzales and Lechowicz & Tseng Page 8 of 13
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(PERS) as an employee of City and entitlement to any contribution to be paid by City for employer contributions and/or employee contributions for PERS benefits.
6.2 Consultant Not an Agent. Except as City may specify in writing, Consultant shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an agent. Consultant shall have no authority, express or implied, pursuant to this Agreement to bind City to any obligation whatsoever.
Section 7. LEGAL REQUIREMENTS.
7.1 Governing Law. The laws of the State of California shall govern this Agreement.
7.2 Compliance with Applicable Laws. Consultant and any subcontractors shall comply with all laws and regulations applicable to the performance of the work hereunder, including but not limited to, the California Building Code, the Americans with Disabilities Act, and any copyright, patent or trademark law. Consultant's Failure to comply with any law(s) or regulation(s) applicable to the performance of the work hereunder shall constitute a breach of contract.
7.3 Other Governmental Regulations. To the extent that this Agreement may be funded by fiscal assistance from another governmental entity, Consultant and any subcontractors shall comply with all applicable rules and regulations to which City is bound by the terms of such fiscal assistance program.
7.4 Licenses and Permits. Consultant represents and warrants to City that Consultant and its employees, agents, and any subcontractors have all licenses, permits, qualifications, and approvals of whatsoever nature that are legally required to practice their respective professions. Consultant represents and warrants to City that Consultant and its employees, agents, any subcontractors shall, at their sole cost and expense, keep in effect at all times during the term of this Agreement any licenses, permits, and approvals that are legally required to practice their respective professions. In addition to the foregoing, Consultant and any subcontractors shall obtain and maintain during the term of this Agreement valid Business Licenses from City.
7.5 Nondiscrimination and Equal Opportunity. Consultant shall not discriminate, on the basis of a person's race, religion, color, national origin, age, physical or mental handicap or disability, medical condition, marital status, sex, or sexual orientation, against any employee, applicant for employment, subcontractor, bidder for a subcontract, or participant in, recipient of, or applicant for any services or programs provided by Consultant under this Agreement. Consultant shall comply with all applicable federal, state, and local laws, policies, rules, and requirements related to equal opportunity and nondiscrimination in employment, contracting, and the provision of any services that are the subject of this Agreement, including but not limited to the satisfaction of any positive obligations required of Consultant thereby.
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Consultant shall include the provisions of this Subsection in any subcontract approved by the Contract Administrator or this Agreement.
Section 8. TERMINATION AND MODIFICATION.
8.1 Termination. City may cancel this Agreement at any time and without cause upon written notification to Consultant.
Consultant may cancel this Agreement upon 30 days' written notice to City and shall include in such notice the reasons for cancellation.
In the event of termination, Consultant shall be entitled to compensation for services performed to the effective date of termination; City, however, may condition payment of such compensation upon Consultant delivering to City any or all documents, photographs, computer software, video and audio tapes, and other materials provided to Consultant or prepared by or for Consultant or the City in connection with this Agreement.
8.2 Extension. City may, in its sole and exclusive discretion, extend the end date of this Agreement beyond that provided for in Subsection 1.1. Any such extension shall require a written amendment to this Agreement, as provided for herein. Consultant understands and agrees that, if City grants such an extension, City shall have no obligation to provide Consultant with compensation beyond the maximum amount provided for in this Agreement. Similarly, unless authorized by the Contract Administrator, City shall have no obligation to reimburse Consultant for any otherwise reimbursable expenses incurred during the extension period.
8.3 Amendments. The parties may amend this Agreement only by a writing signed by all the parties.
8.4 Assignment and Subcontracting. City and Consultant recognize and agree that this Agreement contemplates personal performance by Consultant and is based upon a determination of Consultant's unique personal competence, experience, and specialized personal knowledge. Moreover, a substantial inducement to City for entering into this Agreement was and is the professional reputation and competence of Consultant.
Consultant may not assign this Agreement or any interest therein without the prior written approval of the Contract Administrator. Consultant shall not subcontract any portion of the performance contemplated and provided for herein, other than to the subcontractors noted in the proposal, without prior written approval of the Contract Administrator.
8.5 Survival. All obligations arising prior to the termination of this Agreement and all provisions of this Agreement allocating liability between City and Consultant shall survive the termination of this Agreement.
8.6 Options upon Breach by Consultant. If Consultant materially breaches any of the terms of this Agreement, City's remedies shall include, but not be limited to, the following:
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8.6.1 Immediately terminate the Agreement;
8.6.2 Retain the plans, specifications, drawings, reports, design documents, and any other work product prepared by Consultant pursuant to this Agreement;
8.6.3 Retain a different consultant to complete the work described in Exhibit A not finished by Consultant; or
8.6.4 Charge Consultant the difference between the cost to complete the work described in Exhibit A that is unfinished at the time of breach and the amount that City would have paid Consultant pursuant to Section 2 if Consultant had completed the work.
Section 9. KEEPING AND STATUS OF RECORDS.
9.1 Records Created as Part of Consultant's Performance. All reports, data, maps, models, charts, studies, surveys, photographs, memoranda, plans, studies, specifications, records, files, or any other documents or materials, in electronic or any other form, that Consultant prepares or obtains pursuant to this Agreement and that relate to the matters covered hereunder shall be the property of the City. Consultant hereby agrees to deliver those documents to the City upon termination of the Agreement. It is understood and agreed that the documents and other materials, including but not limited to those described above, prepared pursuant to this Agreement are prepared specifically for the City and are not necessarily suitable for any future or other use. City and Consultant agree that, until final approval by City, all data, plans, specifications, reports and other documents are confidential and will not be released to third parties without prior written consent of both parties.
9.2 Consultant's Books and Records. Consultant shall maintain any and all ledgers, books of account, invoices, vouchers, canceled checks, and other records or documents evidencing or relating to charges for services or expenditures and disbursements charged to the City under this Agreement for a minimum of three (3) years, or for any longer period required by law, from the date of final payment to the Consultant to this Agreement.
9.3 Inspection and Audit of Records. Any records or documents that Section 9.2 of this Agreement requires Consultant to maintain shall be made available for inspection, audit, and/or copying at any time during regular business hours, upon oral or written request of the City. Under California Government Code Section 8546.7, if the amount of public funds expended under this Agreement exceeds $10,000.00, the Agreement shall be subject to the examination and audit of the State Auditor, at the request of City or as part of any audit of the City, for a period of three (3) years after final payment under the Agreement.
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Section 10 MISCELLANEOUS PROVISIONS.
10.1 Attorneys' Fees. If a party to this Agreement brings any action, including an action for declaratory relief, to enforce or interpret the provision of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees in addition to any other relief to which that party may be entitled. The court may set such fees in the same action or in a separate action brought for that purpose.
10.2 Venue. In the event that either party brings any action against the other under this Agreement, the parties agree that trial of such action shall be vested exclusively in the state courts of California in the County of Monterey or in the United States District Court for the Northern District of California.
10.3 Severability. If a court of competent jurisdiction finds or rules that any provision of this Agreement is invalid, void, or unenforceable, the provisions of this Agreement not so adjudged shall remain in full force and effect. The invalidity in whole or in part of any provision of this Agreement shall not void or affect the validity of any other provision of this Agreement.
10.4 No Implied Waiver of Breach. The waiver of any breach of a specific provision of this Agreement does not constitute a waiver of any other breach of that term or any other term of this Agreement.
10.5 Successors and Assigns. The provisions of this Agreement shall inure to the benefit of and shall apply to and bind the successors and assigns of the parties.
10.6 Use of Recycled Products. Consultant shall prepare and submit all reports, written studies and other printed material on recycled paper to the extent it is available at equal or less cost than virgin paper.
10.7 Conflict of Interest. Consultant may serve other clients, but none whose activities within the corporate limits of City or whose business, regardless of location, would place Consultant in a "conflict of interest," as that term is defined in the Political Reform Act, codified at California Government Code Section 81000 et seq.
Consultant shall not employ any City official in the work performed pursuant to this Agreement. No officer or employee of City shall have any financial interest in this Agreement that would violate California Government Code Sections 1090 et seq.
Consultant hereby warrants that it is not now, nor has it been in the previous 12 months, an employee, agent, appointee, or official of the City. If Consultant was an employee, agent, appointee, or official of the City in the previous twelve months, Consultant warrants that it did not participate in any manner in the forming of this Agreement. Consultant understands that, if this Agreement is made in violation of Government Code §1090 et seq., the entire Agreement is void and Consultant will not be entitled to any compensation Consulting Services Agreement between November 21, 2022 City of Gonzales and Lechowicz & Tseng Page 12 of 13
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for services performed pursuant to this Agreement, including reimbursement of expenses, and Consultant will be required to reimburse the City for any sums paid to the Consultant.
Consultant understands that, in addition to the foregoing, it may be subject to criminal prosecution for a violation of Government Code § 1090 and, if applicable, will be disqualified from holding public office in the State of California.
10.8 Solicitation. Consultant agrees not to solicit business at any meeting, focus group, or interview related to this Agreement, either orally or through any written materials.
10.9 Contract Administration. This Agreement shall be administered by the City’s Public Works Director ("Contract Administrator"). All correspondence shall be directed to or through the Contract Administrator or his or her designee.
10.10 Notices. Written notices to Consultant shall be sent to:
Alison Lechowicz, Principal
Lechowicz & Tseng
909 Marina Village Parkway, Suite 135
Alameda, CA 94501 .
Written notices to City shall be sent to:
Mary Villegas, Administrative Specialist/Deputy City Clerk City of Gonzales
P.O. Box 647
147 Fourth Street
Gonzales, CA 93926
10.11 Professional Seal. Where applicable in the determination of the contract administrator, the first page of a technical report, first page of design specifications, and each page of construction drawings shall be stamped/sealed and signed by the licensed professional responsible for the report/design preparation. The stamp/seal shall be in a block entitled "Seal and Signature of Registered Professional with report/design responsibility," as in the following example.
_________________________________________
Seal and Signature of Registered Professional with
report/design responsibility.
10.12 Integration. This Agreement, including the scope of work attached hereto and incorporated herein as Exhibits A and B represents the entire and integrated agreement Consulting Services Agreement between November 21, 2022 City of Gonzales and Lechowicz & Tseng Page 13 of 13
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between City and Consultant and supersedes all prior negotiations, representations, or agreements, either written or oral.
Exhibit A Task Order #1 Scope of Services
Exhibit B Rate Schedule
10.13 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement.
10.14 Non-Responsibility for General Contractor Responsibilities and Duties. Unless otherwise agreed by City and Consultant in writing, nothing in Consultant's services shall be construed to mean that Consultant assumes any of the contractual responsibilities or duties of the general contractor. The general contractor is solely responsible for construction means, methods, sequences and procedures used in the construction of a project and for related performance in accordance with its contract with the City. The general contractor shall not be relieved of its responsibility for the safety of the workplace or for the method or manner of construction. The Consultant and its personnel have no authority to exercise any control over or charge of acts or omissions of the general contractor or their employees in connection with the construction work.
The Parties have executed this Agreement as of the Effective Date.
CITY OF GONZALES LECHOWICZ & TSENG
Carmen Gil, Interim City Manager Alison Lechowicz, Principal Attest:
Mary Villegas, Deputy City Clerk
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EXHIBIT A
TASK #1 SCOPE OF SERVICES
.
September 8, 2022
Patrick Dobbins, Public Works Director/City Engineer
City of Gonzales
147 Fourth Street
Gonzales, CA 93926
Dear Mr. Patrick Dobbins,
Lechowicz & Tseng Municipal Consultants (L&T) is pleased to submit a proposal for Water and Sewer Rate Studies to the City of Gonzales (City). Established in 2017 and operated as a limited liability company (LLC), Lechowicz & Tseng Municipal Consultants is a women-owned firm founded by Alison Lechowicz and Catherine Tseng that focuses on financial planning, rate and fee studies, and management consulting for public agencies. Alison and Catherine have 30 years combined experience in municipal consulting and public finance and have completed over 100 studies compliant with Propositions 218 and
26. We are also a municipal financial advisory firm registered with the Securities Exchange Commission and Municipal Securities Rulemaking Board. We offer a breadth of expertise from financial planning to utility rate design.
We are a small firm that focuses on rate and fee studies for public agencies serving populations of 30,000 or fewer. Our recent experience includes completing similar projects for the Cities of Chowchilla, Kerman, San Fernando, and Waterford and the Templeton Community Services District, among others. These communities are facing similar issues as the City of Gonzales. Templeton CSD, for example, did not have an underlying cost of service analysis to justify its water rate tiers. To comply with Proposition 218 and recent legal rulings, L&T restructured the agency’s tiers to conform with various sources of supply, how the district uses each source throughout the year, and the cost to deliver each source to customers. Amongst other issues, for the City of Wasco (Kern County), we are currently evaluating the sewer rates of a major almond packing facility and an agricultural chemical manufacturer. These customers contribute to intense usage of the system and must be charged fairly to avoid shifting costs to residential customers. We will bring this recent experience to our work for the City of Gonzales.
To provide a comprehensive analysis, L&T will focus on the following:
o Financial Analysis: L&T analyzes revenue streams to meet immediate cash flow needs as well as to plan for future capital projects and deferred maintenance. We will provide the City with a dashboard of financial variables that will clearly illustrate how various considerations such as drought, grant vs. loan funding, high vs. low growth, and high vs. low inflation among others will impact utility cash flows. As a registered municipal financial advisor, we can also conduct detailed reviews of debt obligations and debt capacity. Our final report will provide the City with a financial roadmap that fully documents the cost of service. 909 Marina Village Parkway #135
Alameda CA 94501
(510) 545-3182
LTmuniconsultants.com
o Utility Rate Design: L&T will ensure the City’s rate structure achieves compliance with conservation mandates (SB 606/AB 1668) and Proposition 218 proportionality requirements.
We will ensure that the City’s tiered water rate structure is based on actual costs and appropriately reflects sources of supply. L&T will also review ratepayer equity between existing customers vs. new development as well as industrial customers vs. residential customers. Each customer group should pay its fair share based on how it uses the water and sewer systems.
Existing customers should not subsidize growth and residential customers should not subsidize large food producers.
o Public Outreach: As the City’s last rate study was conducted some time ago, public outreach and education will be critical in gaining public acceptance. We provide value to our clients by taking the lead in data collection, analysis, and outreach. L&T has extensive experience drafting Proposition 218 notices, educating Council members, and explaining the need for rate adjustments. Our approach is to understand any “hot button” issues in local service areas and respect political sensitivities. In particular, we recommend outreach to large industrial customers and developers who may have a high level of engagement with City services. Our final documents will stress the value of the City’s infrastructure, explain why costs are increasing, and describe cost saving measures.
The firm of Lechowicz & Tseng Municipal Consultants and its employees have no personal or professional financial or other interests which could be a conflict of interest.
Our proposal to conduct the utility rate study is attached. As requested, our cost proposal is provided separately. If you have any questions, please contact us.
Sincerely,
Lechowicz & Tseng Municipal Consultants
Alison Lechowicz, Principal and Authorized Representative 909 Marina Village Parkway #135
Alameda, CA 94501
510-545-3182
[email protected]
Firm Overview................................................................................................................... 1 Who We Are................................................................................................................................................................. 1 Services............................................................................................................................................................................ 2 Project Team Organizational Chart.......................................................................................................................... 3 Recent Experience ........................................................................................................................................................ 3 Technical Approach .......................................................................................................... 4 Scope of Work ................................................................................................................... 7 Project Management..................................................................................................................................................... 7 Scope of Services........................................................................................................................................................... 7 Schedule......................................................................................................................................................................... 13 Meetings......................................................................................................................................................................... 13 Project Team ................................................................................................................... 14 References ........................................................................................................................ 22 Templeton Community Services District.............................................................................................................. 22 Town of Discovery Bay ............................................................................................................................................. 23 City of Chowchilla ...................................................................................................................................................... 24 City of Wasco.............................................................................................................................................................. 25 Disclosures........................................................................................................................ 26 No Conflicts of Interest ............................................................................................................................................ 26 Municipal Securities Rulemaking Board ................................................................................................................. 26
TABLE OF CONTENTS
1 WHO WE ARE
FIRM OVERVIEW
Our objective is to provide financial consulting and management services to local governments. Alison and Catherine have over 30 years combined experience in municipal consulting and public finance.
Catherine has a background in urban planning and worked for the City of Oakland before becoming a consultant. Alison has experience working for a civil engineering firm and a background in public administration. Lechowicz & Tseng is registered with the Municipal Securities Rulemaking Board (MSRB) and Securities and Exchange Commission (SEC) as a municipal financial advisory firm. Alison holds the Series 50 (Municipal Advisor Representative) and Series 54 (Municipal Advisor Principal) qualifications.
Lechowicz & Tseng Municipal Consultants is a women-owned firm founded by Alison Lechowicz and Catherine Tseng.
L&T is committed to providing
professional services with superior
value and responsiveness. By utilizing a
small team approach, our clients
receive greater one-on-one attention
and can be assured that the work is
conducted by highly qualified
professionals. Our clients are provided
direct communication with the
principal consultants who guide the
project through each step.
Nature of firm: Women-owned firm
organized as an LLC serving public
agencies
Services: Utility Rate & Fee Studies,
Financial Planning, Capacity Fee Studies,
Utility Appraisal, Expert Witness, Public
Approval Process
Size of firm: Three staff members
Location of office: Alameda, CA
Registrations: Small Business
Enterprise, Women-owned business,
Municipal advisory firm registered with
the Municipal Securities Rulemaking
Board and the Securities and Exchange
Commission
Other languages spoken by staff:
Spanish
2 SERVICES
Employer Identification Number (EIN): 82-0928239
California Small Business #: 2006322
Municipal Securities Rule Making Board #: K1236
Utility Rate & Fee Studies
Utility rate studies deriving both traditional
and innovative rate structures that comply
with cost of service principles and Proposition
218 requirements. Address policy goals,
customer acceptance, and social influences.
Impact Fee/Capacity
Charge Studies
Development impact fees and capacity charge
studies that offset the cost of expanding
infrastructure to serve new development
without placing a burden on existing
customers.
Financial Planning & Modeling
Comprehensive financial plans focused on
immediate needs as well as the long-term
viability of agencies. Our financial models are
flexible and user-friendly to allow for cash
flow sensitivity analysis and to illustrate the
impacts of policy decisions.
Public Approval Process
Lead informational workshops to educate the
public about municipal finance. We provide
start-to-finish assistance in the rate and fee
approval process, including presentations to
decision makers, publication of reports, and
printing and mailing of notices (as applicable).
Utility Appraisal
Develop an inventory of utility assets and
determine fair market value. We assist public
agencies with negotiating the purchase or sale
of utility property.
Expert Witness
Testify on behalf of public agencies to defend
against lawsuits. We also represent public
agencies as streetlight customers of
California's electric utility providers in rate
cases at the CA Public Utilities Commission.
3 PROJECT TEAM ORGANIZATIONAL CHART
RECENT EXPERIENCE
Provided below is a sampling of L&T’s recent projects for agencies of similar size.
AGENCY
ACCOUNTS
OR PARCELS PROJECT
Nipomo CSD (Blacklake) 559 Blacklake Sewer Rate Study (2018) Blacklake Streetlight Rate Study (2022)
McMullin Area GSA 1,150 Groundwater Fee Study (2018)
City of Rio Dell 1,300 Water and Sewer Rate Study (2022) City of Brisbane 2,000 Water and Sewer Rate Study (ongoing) City of Waterford 2,500 Sewer Rate Study (2019)
Templeton CSD 2,800 Water (4 Tiers) and Sewer Rate Study (2018) City of Tehachapi 3,000 Water and Sewer Connection Fee Study (2020) Parks and Civic Connection Fee Study (2021)
City of Anderson 3,500 Water Rate Study (2021)
City of Kerman 3,800 Water and Sewer Rate Study (2018)
City of Chowchilla 3,900 Utilities Rate Study (2020)
City of San Fernando 5,000 Water and Sewer Rate Study (2019) City of Wasco 5,200 Water and Sewer Rate Study (ongoing) Town of Discovery Bay CSD 6,200 Water and Wastewater Rate Study (2020) Water and Wastewater Capacity Fee Study (2022)
Root Creek Water District 6,800 Multiple studies since 2017 CSD – Community Services District; GSA – Groundwater Sustainability Agency
CATHERINE TSENG
Principal - Peer Review
SOPHIA MILLS
Financial Analyst
ALISON LECHOWICZ
Principal / Main Contact Person
4 Project Overview
L&T’s objective for this rate study is to provide compliance with legal requirements while ensuring that the City’s water and wastewater utilities are self-sufficient. Changes in legislation have resulted in many agencies having to make modifications their rate structures. Stringent regulations and aging infrastructure require increased operating expenses and capital investment. We are proponents of simplicity and respecting the current financial and political climate while phasing-in rate adjustments.
Our study will include a comprehensive review of each utility’s finances, including operating costs, reserve funds, and deferred maintenance and capital funding needs to ensure that the water and sewer rates cover the full cost of providing service. Our analysis will review the cost justification for the current water tiers to ensure that the water rates are sufficient to cover expenses while factoring in the impacts of the pandemic and Statewide drought. We will update the sewage strength loading and customer categories. L&T will evaluate rate structure modifications, assess the financial and other impacts of any changes, including the bill impacts to customers, and recommend adjustments if warranted. Additionally, the study will evaluate and update the other utility service charges and fees.
It is key that our final deliverables are easy for the City to understand and implement. We propose to organize our cash flows based on existing budget categories to allow for the easy import or export of data between documents. L&T also structures our reports with reader-friendly executive summaries to allow the general public to grasp key concepts. Our financial models are designed to provide tables and charts that can be pasted into presentations to give visual representations of our work. L&T will also ensure that the City’s billing system can accommodate proposed rate structure adjustments.
Financial Planning
Our approach to financial planning will be to adjust rates to keep up with inflationary cost increases, ensure funding is available for capital projects, meet debt coverage requirements, and model the impacts of growth. L&T will provide cash flow analyses in an Excel-based model fed by a financial dashboard showing how each of these factors impact the City’s bottom line.
In particular, we will model various growth scenarios and impacts on utility services. Costs of expanding facilities should be covered by impact or connection fees from new development. However, there can be delays between when facilities are constructed and when revenues are collected. Moreover, expanded or improved infrastructure may face more stringent regulations and be more costly to operate. Growth in the City’s service area will also have implications for staffing costs, engineering, depreciation, and property insurance. All of these factors will be incorporated into L&T’s cash flows.
We use industry-standard methodologies recommended by the American Water Works Association and our projects include financial models to predict cash flows and rate impacts. We are comfortable building our own Excel-based models as well as reviewing the work of other consulting firms. For
TECHNICAL APPROACH
5 instance, we recently provided a financial master plan and custom model for the Fresno Irrigation District, which has six inter-linked funds and an annual budget of about $18 million.
Screenshot of a recent financial dashboard created by L&T for a public agency client Registered Municipal Advisor
Lechowicz & Tseng Municipal Consultants is registered with the Municipal Securities Rulemaking Board (MSRB) and the Securities Exchange Commission (SEC). We are able to provide detailed advice regarding the timing and structure of debt and the adequacy of rate revenues to meet debt coverage requirements. As a registered advisor, Principal Alison Lechowicz can provide a detailed comparison of financing options and make recommendations, if appropriate.
Rate Design
Subsequent to the San Juan Capistrano court case, volume rates, tiered pricing, and conservation rates are under increased scrutiny in California. Agencies may no longer adopt usage rates to meet conservation objectives without a supporting cost analysis. At the same time, SB 606 and AB 1668 require water purveyors to gradually reduce indoor, residential water use. L&T will guide the City through compliance with these regulations and can provide options to ensure the City’s water usage tiers meet Proposition 218 proportionality requirements.
Currently, residential and commercial customers are charged for water service according to a fourtiered rate structure. Industrial customers are charged for usage based on a single tier. Our approach is to evaluate current levels of consumption for each customer class and compare with the existing water tiers. Some possible water rate structure modifications may include the addition of a monthly fixed charge, changing the tier breakpoints, reducing the number of tiers, and developing a separate rate for commercial customers. The key to success is demonstrating actual costs attributable to higher levels of use such as higher electricity costs due to peak pumping, upsizing of equipment, conservation compliance or programs, and/or imported water costs.
6 The City’s customer base is unique in that the majority of usage is attributed to several industrial and commercial customers. The goal of the rate design will be to ensure that each customer class pays their proportionate share of their impact on each system. For example, agricultural customers and food manufacturers typically have peak water usage and sewer flows during the late
summer/early fall harvest season which could spike usage of the City’s water and sewer infrastructure. Food manufacturers typically have high BOD but do not necessarily contribute to other wastewater pollutants such as TSS. These customers should pay for their peak flows and pollutant loading such that residential customers are not burdened with these costs.
If modifications to the current rate structure are needed or desired, we will work with the project team to phase in modifications, clearly explain why the changes are needed, and minimize the impact on ratepayers. Additionally, we will take into consideration staff’s time and capabilities to administer any changes and will ensure that the City’s billing system can accommodate proposed rate structure adjustments.
Public Approval
L&T has a breadth of experience with controversial rate, fee, and tax increases. We are equipped to handle many of the administrative tasks such as drafting, printing, and mailing notices, if appropriate.
Alison and Catherine performed similar services for the cities of Anderson, Chowchilla, San Fernando, Waterford, the McMullin Area Groundwater Sustainability Agency, and the Town of Discovery Bay.
We find that when the ratepayers understand the need for the fees and the basis of costs they are more accepting of increases. Outreach is particularly important for smaller public agencies as they have a greater risk of ratepayers garnering a 50% majority protest to deny a rate adjustment. L&T’s strategy is to meet with interested stakeholders early in the assignment to hear concerns and clearly explain the need for fees. The City of Gonzales has several large commercial customers that may be more likely to challenge any rate adjustments as it impacts their bottom line. We highly recommend targeted outreach to these entities to address any critical issues early in the study.
This process has been extremely beneficial in other studies that we’ve completed. As example, Alison conducted Public Works workshops for the Cities of Berkeley and Modesto. She also met with developers regarding rate and fee studies conducted for the Town of Discovery Bay and the Templeton Community Services District. Catherine Tseng worked with the 15-member Water Advisory Committee in the City of Davis. The objective is to demonstrate the value of the City’s services to ratepayers. We will draft public notices, newsletters, and web or social media postings as appropriate.
L&T is happy to lead public presentations.
7 PROJECT MANAGEMENT
Our approach to our work is simple – we roll up our sleeves and get the job done. When initiating a project, it’s impossible to know every twist and turn an assignment may take. Unexpected issues may arise, out of scope tasks may be required, and political sensitivities may become uncovered. L&T strives to be flexible and responsive to our clients. We remain available to take on additional tasks, coordinate between departments, agencies, and contractors, attend evening meetings, make presentations, and provide clerical support such as printing and mailing of public notices. Successful projects consist of both major deliverables and many small administrative tasks. Lechowicz & Tseng maintains high client satisfaction because we take responsibility for all aspects of our assignments.
We have an excellent track record of completing assignments on-time. L&T will be responsible for all project analysis and the preparation of meeting and presentation materials for the project team and Council meetings. L&T strives to be flexible and responsive to our clients. During project initiation, we will finalize the schedule and set deliverables by working backwards from the desired Proposition 218 hearing date. We will provide bi-weekly check-ins and monthly billing summaries to ensure that the project is on schedule and within budget.
SCOPE OF SERVICES
Provided below is our suggested scope of services which elaborates on our project approach and methodology. L&T will work with the City to finalize a scope tailored to meet your needs.
SCOPE OF WORK
Task 1:
Data Gathering
Task 2:
Financial Plan
Task 3:
Cost Allocation
Task 4:
Rate Design
Task 5:
Reports &
Model
Task 6:
Meetings &
Presentations
Task 7:
Prop 218
Assistance
8 Task 1 – Project Kickoff and Data Gathering
Kickoff Meeting
L&T will meet with City staff for a project kickoff meeting to review study goals, milestones, identify project team members, and determine roles and responsibilities.
Data Gathering
Assemble the necessary data to complete the study. The goal is to understand the City’s financial standing, current rate structure, and utility billing information. A data needs list will be provided to City staff prior to the kickoff meeting.
Task 2 – Financial Plan
Annual Revenue Requirements
With staff input, we will estimate future operating and capital expenditures to estimate annual revenue needs. We will factor in projections of growth, repairs and replacements, cost escalation, sewer flows, conservation, regulatory compliance, and operational changes to ensure that all future expenses are included.
Review Reserve Fund Targets
This subtask involves reviewing the current operating and capital reserve balances for each utility and evaluating reserve targets for emergency reserves, rate stability reserves, long term capital reserves, short term capital reserves, or other categories as appropriate. At minimum, our analysis will review the age and condition of the systems, annual depreciation costs, debt service reserves, and expenses related to emergencies.
Evaluate Debt Service Coverage
L&T will review budgets, audits, and bond disclosure documents to understand current debt obligations.
We will determine current coverage ratios based on net operating revenues compared to annual debt service expenses. We will also evaluate if the utilities have capacity to take on additional debt at the current revenues. Our final rate recommendations will include projections to meet coverage requirements in the years to come.
9 Review Capital Improvement Needs
Our cash flow analysis will isolate the impacts of
capital funding separate from increases needed to
fund other utility expenses. Typically, L&T
suggests three capital funding scenarios: 1) bare
bones: fund only critical improvements, 2) priority
funding: fund critical projects plus high-priority,
level of service improvements, and 3) full funding:
fund all proposed projects. We will work with the
agency to determine project affordability and
adjust our rate recommendations accordingly.
L&T will review various financing options to fund
capital needs, including pay-as-you-go/cash funding and other debt financing alternatives, such as State loans/grants, bank loans, and certificates of participation/bonds.
Cash Flow Projections
Annual revenue requirements and capital funding needs will be used to develop long-term cash flow projections summarizing the financial position of the utilities over the next 10 years. The cash flow projections will estimate rate increases needed to meet annual revenue requirements, debt obligations, and reserve fund targets.
Sensitivity Analysis
Based on input from the project team, L&T will incorporate rate sensitivity analysis to determine affordability. We will determine rate impacts under various scenarios, possibly including cash funding of projects, debt funding of projects, water cutbacks, etc. Sensitivity analysis can often become an iterative process. L&T is flexible to run additional scenarios as needed.
Task 3 – Cost Allocation
Evaluate Customer Billing Data
We will evaluate historical and current water consumption, wastewater flow, pollutant loading, and other billing data to estimate future drought and normal year water demands. A key aspect of this task is to determine the amount of water use and revenue collected from meter charges and volume rates.
Functionalize Costs
Functionalization is the allocation of expenses by major operating activities for the utilities, including water supply, peak pumping, treatment, storage, transmission, overhead, and administration. Sewer categories will consist of customer service, flow, BOD, and TSS.
Allocation to Customer Classes
After costs have been categorized by function, costs are then allocated to each customer class based on water demand and sewer flow and loading characteristics. The result produces fixed and variable revenue requirements for each customer class which can be recovered via fixed charges and usage rates. 10 The allocation to customer classes will be based on American Water Works Association best practices and meet the proportionality requirements of Proposition 218.
Tiered Rate Review – If needed
In this subtask, L&T will review tier breakpoints and determine costs that can be assigned to each tier.
Task 4 – Rate Design
Assess Current Rate Structure and
Customer Classifications
Review the current rate structures and
customer classifications to assess the advantages
and disadvantages of the existing systems and to
determine compliance with industry standards
and court rulings. While compliance with
Proposition 218 will guide all our
recommendations, additional criteria may
include: the impact on customer bills, public
understanding, revenue stability, ease of
implementation, compatibility with the existing
billing system, and staff effort needed for
administration.
Rate Alternatives
Based on the criteria developed with staff and the cost of service analysis, we will identify two (2) alternative rate structures or modifications to the current water and sewer rate structures. In particular, L&T will ensure that any tiered rate options are cost-justified and compliant with recent court rulings. We intend to provide a detailed analysis to assess the appropriateness of desired tiers and to ensure compliance with the requirements of Proposition 218. We will determine if usage rates align with projected water sources and costs. It may be prudent to phase-in adjustments over time.
For our sewer recommendations, we will fully document all underlying flow and pollutant estimates used in our analysis. We will outline the advantages and disadvantages of each option. This task includes a legal review of current and proposed rate design alternatives. As needed, we will coordinate with legal counsel. For the final study, we will present rate structure options that both meet the agency’s needs and relevant legal requirements. L&T will compare all our estimates and recommendations with those used by other local entities.
Bill Impacts
Based on the recommended rates, calculate the bill impacts for a sample of typical customers including both residential and industrial. If needed, develop an implementation plan to phase in adjustments.
Survey of Local Rates
We will prepare a survey comparing current
and proposed bills to other local agencies.
The survey will be summarized in tables and
charts that can be used for outreach,
presentations, and the final report. We will
also prepare a bill comparison for different
levels of water use and different customer
classes. The final list of surveyed agencies will
be determined by the City and will include at
least 6 agencies.
11 Finalize Recommendations
Our rate recommendations will include multi-year rate increases and rate design adjustments. The final plan will show projected rates for each customer class for each year.
Review and Update Other Service Charges
Administrative fees for miscellaneous services are subject to Proposition 26 and should be based on the reasonable cost of service. L&T will review the City’s current service charges (including fees for backflow devices, plan reviews, hydrant meters, etc.) and update the charges based on current costs. If warranted, L&T will interview staff to determine staff time and materials needed to provide each service.
We will calculate fully burdened hourly rates, vehicle and equipment expenses (if applicable), and administrative overhead. We can also provide a survey of surrounding agencies to gauge whether the current miscellaneous fees are in line with other utilities. Moreover, L&T will work with the project team to determine whether additional fees and charges are necessary.
Task 5 – Reports & Model
Submit a draft summary report for review and feedback. The report will summarize findings and recommendations and discuss key alternatives when applicable. We will then incorporate all staff comments and update recommendations accordingly. The final report will reflect input received from staff and elected officials. Our reports are intended to serve as the administrative record and will be compliant with Propositions 218 and 26.
L&T will also submit an Excel-based financial model at the conclusion of the study including all rate calculations and a user-friendly data entry dashboard pre-loaded with our financial planning assumptions.
L&T focuses on straightforward reports and models that easily convey information. If planning assumptions change after the assignment is complete, the City will have the underlying information to change course and make adjustments. All study materials including the final Excel-based financial model will be submitted to the agency in their native format (Word, Excel, Powerpoint, etc.). L&T’s materials do not contain any proprietary information or specialized software.
Task 6 – Meetings & Presentations
L&T proposes six (6) in-person meetings and bi-weekly virtual check-in meetings. For the in-person meetings, a sample meeting schedule could include: one (1) kickoff meeting, one (1) meeting for the presentation of the draft rate structure alternatives to City Council, two (2) community outreach workshops, one (1) meeting for the presentation of the final rate study report to City Council, and one (1) meeting for the Proposition 218 hearing.
12 Task 7 – Proposition 218 Procedural Assistance
L&T is available to provide comprehensive Proposition 218 procedural assistance including arranging the printing and mailing of the Proposition 218 notice. We recommend public agencies use the Proposition 218 notice as an outreach opportunity to explain why the rate adjustments are needed and to highlight what has been done to help reduce costs.
We will coordinate and conduct all deliverables associated with compliance with Proposition 218 including: aggregating the ratepayer and property owner mailing lists, drafting the Proposition 218 notice, translating the notice into other languages such as Spanish, printing the notices, and certifying the mailing of the notices. The actual cost of mailing the Proposition 218 notice is a separate charge and will be based on the number of mailers & printing costs.
RATE STUDY DELIVERABLES
o Data request list
o Review of prudent reserves and recommended reserve fund levels o Cash flows with anticipated funding sources and cost recovery o Ten-Year Financial Plan
o Analysis of fixed and variable operating and capital costs o Evaluation of customer characteristics including water use/sewer flow, strength loading, and number of accounts
o Rate design alternatives (at least 2 presented to Council as per RFP) o Final five-year rate projections
o Bill impacts and rate survey of local agencies (at least 6 other cities) o Recommended updates to other utility service charges (Proposition 26 fees) o Draft and final reports
o Financial Model in Excel
o Proposition 218 public notice draft and/or educational materials o Six (6) in-person meetings/presentations with the City o Bi-weekly virtual progress meetings with staff and action items distributed to the project team o Printing and mailing of the Proposition 218 public notice 13 SCHEDULE
Provided below is Lechowicz & Tseng’s draft schedule for the rate study. We propose the following schedule with the Proposition 218 hearing in June 2023 and new rates going into effect July 1, 2023. We are happy to adjust the schedule as needed.
V – virtual meeting with staff; 1- 6 – in-person meetings; D – draft report submitted; F – final report submitted
MEETINGS
Provided below is a sample meeting schedule for our proposed in-person meetings that will be updated with input from the project team. In addition to six (6) in-person meetings, our proposal includes biweekly virtual meetings for progress meetings with staff.
Meeting #1 Kickoff meeting with Project Team
Meeting #2 Present draft findings and alternative rate structure options to City Council Meeting #3 Community outreach meeting
Meeting #4 Community outreach meeting
Meeting #5 Present final report to City Council; initiate Proposition 218 process Meeting #6 Proposition 218 Public Hearing to adopt rates
PROJECT TASK
1. Kickoff & Data Gathering
2. Financial Plan
3. Cost Allocation
4. Rate Design
5. Reports & Model D F
6/7. Meetings & Prop 218 1 V V 2 V 3 V 4 V 5 PROP 218 6
NOV DEC JAN FEB MAR APR MAY JUN
14 Alison Lechowicz will serve as the Principal-in-Charge and main contact person. Catherine Tseng will provide peer review. Sophia Mills will serve as financial analyst. No subconsultants are needed for this assignment.
Analyst - Sophia Mills
15 years consulting experience
Master of Public Administration
Testified as an expert witness at the
CA Public Utilities Commission
Series 50 and 54 – Municipal Advisor
Representative and Municipal Advisor
Principal Qualifications
Project Manager
and Lead Analyst
Financing alternatives and
cash flow projection
Rate recommendations
Public presentations
Alison Lechowicz
PRINCIPAL
QUALIFICATIONS Responsibilities
Catherine Tseng
PRINCIPAL
15 years consulting experience
Master of Urban Planning
Bachelor of Architecture
Peer Review
Methodological review
Review of draft and final reports
Substitute for Ms. Lechowicz if
needed
QUALIFICATIONS Responsibilities
PROJECT TEAM
15 Alison Lechowicz
EDUCATION
o Columbia University
Master of Public Administration
o University of California, Berkeley
Bachelor of Science
Conservation & Resource Studies
REPRESENTATIVE ASSIGNMENTS
o 15 years consulting experience: 5 years
Co-founder and Principal at L&T Municipal
Consultants, 7 years as Principal and
Financial Analyst at Bartle Wells
Associates, 3 years as Financial Analyst at
Carollo Engineers
o Testified as an expert witness at the
CA Public Utilities Commission in electric
rate cases of Pacific Gas & Electric,
Southern California Edison, and
San Diego Gas & Electric
o Municipal Securities Rulemaking Board,
Series 50 & 54 – Municipal Advisor
Representative and Municipal Advisor
Principal
EXPERIENCE
[email protected]
909 Marina Village Parkway #135
Alameda, CA 94501
(510) 545-3182
Templeton Community Services District:
Completed a water and sewer rate study.
Conducted an analysis of the District’s four water
sources, determined the marginal cost of each
source, and assigned each source to a water rate
tier. Evaluated the transition of the District from
regional wastewater treatment to local treatment.
____________________________________
Nipomo Community Services District:
Conducted sewer and street light rate studies for
the Blacklake service area. Evaluated interim sewer
rates prior to regionalization of treatment facilities.
Determined lighting costs and options for
converting to LED.
____________________________________
Town of Discovery Bay: Consultant for the
Town for over ten years having conducted multiple
water and sewer rate studies and capacity fee
studies. Assisted the Town in recovering costs for
new wastewater regulatory requirements.
___________________________________
City of Kerman: Completed a water and sewer
rate study for the City. Updated winter water use
estimates for single family residential sewer rates.
Phased-out discounts for multifamily sewer
customers.
____________________________________
Root Creek Water District (Madera County):
Financial plan for the District’s groundwater basin
and agricultural water service. Water, sewer, and
storm drain rates and development fees for
municipal service.
____________________________________
Stege Sanitary District (Contra Costa
County): Sewer rate and connection fee study.
Conducted extensive review of water usage
patterns to determine flow rates of customer
classes. Proposed a 5-year phase-in for a new
multifamily rate.
16 Provided below is a sampling of Alison Lechowicz’s project experience since 2010. Prior to 2010, Ms. Lechowicz worked for a civil engineering firm conducting financial analysis for master plans.
CLIENT PROJECT DATE COMPLETED
City of Alameda Sewer Financial Plan and Rate Study May 2015 City of Anderson Water and Sewer Rate Study February 2021 Town of Apple Valley Water System Acquisition Feasibility Analysis July 2011 City of Berkeley Sanitary Sewer Rate Study June 2015
City of Carmel-by-the-Sea Bond Refinancing October 2010 CA City County Street Light
Association
Rate economist and expert witness March 2010 to present (ongoing)
City of Chowchilla Water, Sewer, Storm Drain, and Solid Waste Rate Study
June 2020
City of Chula Vista
Wastewater Capacity Fee Study
Salt Creek Sewer Basin Impact Fee Study
Depreciation Review
May 2014
June 2015
July 2018
City of Clovis Water User Rates and Fee Study February 2016 City of Colfax Sewer Rate Affordability Review June 2010 City of Colusa Development Impact Fee Study
Water System Valuation
June 2011
September 2014
Contra Costa Water District Water Rate Study February 2015 City of Cotati Water and Sewer Rate Study February 2013 Town of Discovery Bay Water and Sewer Rate and Capacity Fee Studies Multiple studies since 2012 City of Emeryville Sewer Rate Study November 2016
Fresno Irrigation District Financial Master Plan Ongoing City of Hemet
Water and Sewer Rate Studies and System
Valuations
Water Fund Rental Fee Analysis
July 2015
August 2018
Home Gardens Sanitary
District
Sewer Rate and Capacity Fee Study May 2015
Indian Wells Valley Water
District Bond Refinancing December 2012
City of Kerman Water and Sewer Rate Study October 2018
City of Kingsburg Solid Waste Rate Study Ongoing
Kings River E. GSA Groundwater Fee Study February 2018
City of Lancaster Streetlight Valuation June 2014
17 CLIENT PROJECT
DATE
COMPLETED
Napa Berryessa Resort
Improvement District Water and Sewer Assessment July 2012 Newhall County Water District Water Rate Litigation Support November 2012 Nipomo CSD Blacklake Sewer Rate Study
Blacklake Streetlight Rate Study
January 2019
March 2022
Novato Sanitary District Capacity Fee Study
Sewer Rate Study
March 2016
April 2016
City of Palmdale Sewer Service Charge Analysis May 2011 City of Rio Dell Wastewater Rate Study
Water and Sewer Rate Study
May 2014
April 2022
Root Creek Water District Water, Sewer, and Storm Drain Rate Study and Financial Plan
On-call consulting services
April 2016
Ongoing
San Diego County Water
Authority
Cost Allocation Review May 2011
City of San Fernando Water and Sewer Rate Study December 2019 San Joaquin County Utility Appraisal
Utility Appraisal Update
November 2018
January 2022
City of Santa Clarita Sewer Maintenance Feasibility Study June 2014 Saticoy Sanitary District Bank Loan Financing September 2013 South Tahoe Public Utility
District
Sewer Bond Refunding September 2012
Stege Sanitary District Multiple sewer rate and connection fee studies Multiple studies since 2010 Sunnyslope County Water
District
Water and Sewer Bond Refinancing October 2014
Tahoe Truckee Sanitation
Agency
Sewer Fee Ordinance Review May 2010
City of Tehachapi Water and Sewer Connection Fee Study
Parks and Civic Impact Fee Study
February 2020
March 2021
Templeton CSD Water and Sewer Rates and Capacity Fee Study Parks and Fire Impact Fees
November 2018
Triunfo Sanitation District Water Infrastructure Financing Automated Meter Financing
February 2011
May 2014
Tulare Lake Drainage District Project Financing
Project Financing
March 2012
January 2013
City of Wasco Water and Sewer Rate Study Ongoing
City of Waterford Sewer Rate Study June 2019
18 Catherine Tseng
EDUCATION
o Columbia University
Master of Urban Planning
o University of California, Berkeley
Bachelor of Arts
Architecture
REPRESENTATIVE ASSIGNMENTS
o 5 years Co-founder and Principal at L&T
Municipal Consultants
o 10 years prior consulting experience:
Vice President at Bartle Wells Associates
o 2 years civil servant: City of Oakland
o Specializes in utility rates, capacity charge,
and financing plans for public works
projects, and Proposition 218 compliance
EXPERIENCE
catherine@
LTmuniconsultants.com
(510) 858-9228
909 Marina Village Parkway #135
Alameda, CA 94501
City of Chowchilla: Completed a water, sewer,
storm drain, and solid waste rate study. Rates will
support the City’s recent bond issuances and
overcome prior deficit spending for the solid waste
enterprise.
_____________________________________
City of San Fernando: Water and sewer financial
plan and rate study and Proposition 218 printing and
mailing. Offered rate options to meet affordability
criteria including funding of only high priority
projects.
____________________________________
City of Anderson: Completed a water rate study
to address depleting reserves. Analyzed multiple
rate scenarios to minimize impacts to customers.
____________________________________
City of Brisbane: Currently conducting a water
and sewer rate study. The City last updated rates in
2013 but has not done a comprehensive cost of
service analysis since 2001. The 2021 update will
also evaluate rates for a new development area that
will double the City’s service area.
____________________________________
City of Rio Dell: Conducted a water and sewer
rate study to fund mandated capital projects and
eliminate operating deficit.
____________________________________
City of Davis: Water financial plan and rate study
assessing various conservation-oriented water rate
structures and developed drought surcharge.
Worked closely with citizens’ advisory committee
to develop recommendations to City Council.
19 Provided below is a sampling of Catherine Tseng’s project experience since 2006.
CLIENT PROJECT DATE COMPLETED
Alameda County Water
District Water Development Fee Study January 2012
City of Anderson Water and Sewer Rate Study February 2021 Armona Community Services
District Water and Sewer Rate Study March 2008
City of Benicia
Raw Water Rate Study and Update
Water Rate and Connection Fee Study and Update
Drought Rate Study
August 2013 and Sept 2015
February 2013
September 2014
Big Bear City Community
Services District Water, Sewer, and Solid Waste Rate Study May 2015 City of Brisbane Water and Sewer Rate Study Ongoing
City of Chowchilla Water, Sewer, Storm Drain, and Solid Waste Rate Study June 2020
Coastside County Water
District
Water Financing Plan
Water Rate Study
August 2009
January 2010
Crestline Sanitation District Wastewater Rate Study June 2015 City of Davis Water Rate Study
Water Rate Study Update
March 2013
September 2014
Diablo Water District Water Bond Financing
Bond Refinancing
August 2010
April 2013
El Dorado Irrigation District Development Impact Fee Study Water Rate Study
October 2008
January 2009
Elk Grove Water District Water Financial Plan and Rate Study December 2007 Fairbanks North Star Borough Bond Refinancing November 2011 and September 2013
Fresno Irrigation District Financial Master Plan Ongoing City of Glendale Water Rate Study May 2015
Town of Hillsborough Water and Sewer Rate Study December 2006 City of Hanford Water Financing December 2007
Humboldt Bay Municipal
Water District Water Financial Plan April 2011
Indian Wells Valley Water
District
Water Rate Study
Bond Financing
Water Rate Cost of Service and Development
Impact Fee Study
January 2007
August 2009
January 2012 and 2015
20 CLIENT PROJECT DATE COMPLETED
City of Menlo Park Water Rate Study
Recycled Water Analysis
May 2015
October 2015
Montara Water & Sanitary
District Water and Sewer Rate Studies Multiple studies since 2006 Montecito Water District Drought Rate Study February 2015 Novato Sanitary District Bond Financing October 2011
Olivehurst Public Utilities
District Water Rate Study and Updates 2007, 2009 and 2014 City of Patterson Water and Sewer Rate and Capacity Fee Studies Multiple studies since 2010 City of Rio Dell Water and Sewer Rate Study April 2022
Root Creek Water District Financial Policy Manual July 2017 Running Springs Water District Water, Sewer, Fire and Ambulance Rate Studies July 2010 City of San Bruno Water and Sewer Rate Study April 2012 City of San Fernando Water and Sewer Rate Study December 2019 Sanitary District No. 5 -
Tiburon Financial Review September 2013
Sausalito-Marin City Sanitary
District Wastewater Facilities Financing Plan May 2016
Selma Kingsburg Fowler
Sanitation District Capital Improvements Program Study March 2008 Solano County Water Agency Reserve Fund Study May 2007
Sonoma County Water Agency Sewer Service Charge and Volumetric Sewer Rate Study August 2012
City of Tulare Bond Financing 2010, 2012, 2013, and 2015 Union Sanitary District Sewer Capacity Fee Study October 2010 City of Vacaville Water and Drought Rate Study October 2015 Town of Yountville Water and Sewer Rate Study
Recycled Water Rate Study
February 2011
April 2012
21 Sophia Mills
EDUCATION
o Davidson College
Bachelor of Arts
Economics, Spanish
REPRESENTATIVE ASSIGNMENTS
Town of Discovery Bay CSD: Water and sewer
rate study. Assisted the Town in rate updates to
accommodate new wastewater regulatory
requirements and capital project funding. Also
completed a water and sewer capacity fee study.
____________________________________
City of Anderson: Completed a water rate study
to address depleting reserves. Analyzed multiple
rate scenarios to minimize impacts to customers.
_____________________________________
City of Rio Dell: Conducted a water and sewer
rate study to fund mandated capital projects and
eliminate operating deficit. Analyzed impacts of alternative rate structures for each utility. ____________________________________
City of Tehachapi: Recently completed a parks
and recreation development impact fee study as well
as a civic impact fee study based on a 20-year
planning horizon.
____________________________________
City of Brisbane: Currently conducting a water
and sewer rate study. The City last updated rates in
2013 but has not done a comprehensive cost of
service analysis since 2001. The 2022 update will
also evaluate rates for a new development area that
will double the City’s service area.
____________________________________
sophia@
LTmuniconsultants.com
909 Marina Village Parkway #135
Alameda, CA 94501
(510) 529-8056
o Fluent in Spanish
o Proficient in Python 2.7, SAS (statistical
analysis software), ArcGIS, HTML, and
CSS
OTHER SKILLS
Consulting Services Agreement between November 21, 2022 City of Gonzales and Lechowicz & Tseng - Exhibit B Page 1 of 1 1168358
EXHIBIT B
RATE SCHEDULE
NOT TO EXCEED FEE
The following table outlines Lechowicz & Tseng Municipal Consultants’ proposed budget by task. Our not-to-exceed Fee Estimate includes six (6) in-person meetings and bi-weekly virtual check-in meetings as requested by the City. The fee can be reduced by $1,200 per meeting that is conducted virtually instead of in-person. We remain flexible to refine our scope and price proposal to meet the City’s needs.
* The budget includes the estimated cost to print and mail the Proposition 218 notices based on our experience with other public agencies of similar size. Direct expenses can vary based on the specifications for the Proposition 218 notices such as black and white or color, number of pages, envelope or postcard configuration, English only or English and Spanish translations, etc. Printing costs are billed at cost (no markup) plus L&T staff time to manage the process.
BILLING RATE SCHEDULE 2022/2023
Lechowicz & Tseng’s hourly rate is $195 for principals and $120 for staff analysts. No subconsultants are needed for this assignment. Professional time rates include all overhead and indirect costs. Direct expenses incurred on behalf of the client will be billed at cost. Direct expenses include, but are not limited to:
o Travel, meals, lodging o Automobile mileage
o Printing and report binding o Courier services and mailing costs o Outside computer services or software
development
o Special legal services
Lechowicz Tseng Mills
Project Mgr Peer Review Financial Analyst
$195/hour $195/hour $120/hour
1. Kickoff & Data Gathering 8 0 12 20 $3,000
2. Financial Plan 36 4 20 60 $10,200
3. Cost Allocation 18 0 16 34 $5,430
4. Rate Design 32 4 24 60 $9,900
5. Reports & Model 28 6 34 68 $10,710
6. Meetings & Presentations 30 6 18 54 $1,800 $10,980
Subtotal 152 20 124 296 $1,800 $50,220
7. Proposition 218 Assistance* 6 0 10 16 $7,000 $9,370
TOTAL PROJECT BUDGET 158 20 134 312 $8,800 $59,590
PROJECT TASKS
HOURS
BUDGET
Total
DIRECT
EXPENSES
FEE ESTIMATE
Lechowicz & Tseng Municipal Consultants
(510) 545-3182
LTmuniconsultants.com